Originally Posted by FBinNY

OK, to be clear, do you mean that when the indicator on the lever is on "1" the chain isn't on the low gear (innermost) sprocket?

If so, this is a common cable adjustment. There's a threaded adjuster where the cable attaches to the derailleur. If you hold the rear wheel off the ground, pedal and turn the adjuster, the RD will shift. What you want to do is to keep adjusting this until the chain is on the sprocket that corresponds to the lever position.

Keep in mind that this is a very highly simplified answer, and there may be more issues, so after seeing if this helps, you need to find a turorial on derailleur adjustments and make sure ALL the adjustments are properly set.