This quote is from the Opera Falstaff by Verdi.  Fenton sings it to Nannetta in Act 2 Part 2: 

Come ti vidi
M’innamorai,
E tu sorridi
Perchè lo sai.

The Italian can be translated to:

"When I saw you I fell in love, and you smiled because you knew."  

It is a lovely opera.  Bioto (mentioned by previous users) who wrote the libretto for the opera plagiarized a lot of quotes from Shakespeare: Henry IV, Romeo and Juliet, Merry Wives of Windsor, and Othello, among others.  This particular line does not exist in ANY of Shakespeare's works.  ( I personally think it is funny that Bioto plagiarized Shakespeare and one of the few lines he actually made up-- credit is given to the Bard.)

So why the confusion?

Blame Facebook and Twitter-  There is also some blame to go to a small print shop that printed it on throw pillows back in the early 2000s and attributed it to Shakespeare.  Truth be known, someone probably found the quote, saw it was from Falstaff, and assumed that Shakespeare wrote it, never realizing that Shakespeare never named a play after one of his most famous characters.  

There is no way that this quote is from any Shakespeare play.  Among other things, it sounds nothing like the kind of language that is used in the plays Shakespeare wrote.

I Googled it, and one place said it's from Romeo and Juliet.  But it definitely is not.  Another said it was from Hamlet.  It's not in there either.

The answer below says this comes from Hamlet Act II, Scene 2.  But it does not.  You can follow the link below, use the "find" function and type in "smile."  The word "smile" never appears in the text.

Finally, some results say it was written by someone called Arrigo Boito who wrote librettos for operas.

At any rate, there's no way this quote is an actual quote from Shakespeare.  He wrote stuff like "Shall I compare thee to a summer's day" and "But soft, what light through yonder window breaks" -- hardly even the same language as the quote you give.