In terms of the order that they were published by Lewis, it goes:
Lion - Caspian - Treader - Chair - Horse - Nephew - Battle
In terms of the order that things actually occur in the world of Narnia, it goes:
Nephew - Lion - Horse - Caspian - Treader - Chair - Battle
The Magician's Nephew creates the world of Narnia - the Pevensies enter the world in the Wardrobe, and the Horse and his Boy follows the adventures of one of the children. A thousand years later, the four re-enter Narnia to help Caspian, and three years later, Edmund and Lucy (joined by a cousin, Eustance) rejoin Caspian at sea with the Dawn Treader. These are followed by the Silver Chair and the Last Battle.
I'm a fan of reading them the way Lewis released them - *SPOILERS*
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If you read the Magician's Nephew, you already know about the magic in the wardrobe, the street lamp, the professor's history, etc.