In Act III, scene 1, of "Romeo and Juliet," after trying to intervene in the argument between Mercutio and Tybalt, telling Tybalt that he now loves, rather than hates him, Romeo inadvertently comes between Tybalt and Mercutio, causing Mercutio to be issued a grave wound. For, Tybalt has stabbed Mercutio under Romeo's arm. When Mercutio asks Romeo, "Why the devil came you between us! I was hurt under your arm," (III,i,86), Romeo replies, "I thought all for the best" (III,i,87).
As Mercutio cries that he will be "worms' meat," Benvolio carries him out. Romeo bemoans the fatal injury to his friend, Mercutio:
This gentleman, the Prince's near ally,/My very friend, hath got his mortal hurt/In my behalf, my reputation stained/With Tybalt's slander--Tybalt, than an hour Hath been my knsman. O sweet Juliet,/Thy beauty hath made me effeminate,/And in my temper softened valor's steel! (III,i, 92-98)
Ashamed, Romeo feels that he has become womanly by trying to talk to Tybalt rather than pulling out his sword and fighting as Mercutio has done. Now, tragically, Mercutio is dead. With this news Romeo becomes incensed, sensing "This day's black fate" which will be followed by more. He shouts at the returning Tybalt, challenging him to take back the insult of "villain" said in their earlier interchange. But, Tybalt tells Romeo that he will make him join his friend. As they fight, Romeo kills Tybalt; Benvolio urges Romeo to run, for the citizens have witnessed the scene:
The Prince will doom thee death/If thou art taken. Hence, be gone, away! (III,i,116-117)
The day's "black fate on more days doth depend" has made Romeo its victim this time. He shouts, "Oh, I am fortune's fool!" (III,i,117), meaning he has been fooled by this fate that he has earlier recognized, but did not know what it had in store for him.
This scene reiterates and underscores the theme of fate in "Romeo and Juliet" as the well-meaning Romeo has fallen into very bad luck in causing the death of both Mercutio and Tybalt. With fate making him a "fool," the "star-crossed" lover will soon be separated from his love, and he will encounter other workings of fate, as well.
In Act III, Scene 1, Romeo has just killed Tybalt after Tybalt killed Mercutio. Romeo was trying to break the fight up, but Tybalt sneakily killed Mercutio, which made Romeo so mad that he killed Tybalt.
When Romeo calls himself fortune's fool he means that he has really bad luck. He says this because he was only trying to keep the peace but now he's going to be in a lot of trouble with the Prince.
And he really does get into trouble. Benvolio tries to tell the Prince that Romeo was being a peacemaker, but the Prince banishes Romeo anyway.