Mercutio's declaration, "A plague o' both our houses!," immediately after being fatally stabbed by Tybalt, is significant because it characterizes just how much damage the feud between the Montagues and Capulets is causing. Plus, more importantly, Mercutio's line significantly expresses his own feelings about the feud, feelings that the audience echoes at this point in the play.
We know that Mercutio's line is a significant reference to the two families' feud because the phrase "both your houses" refers to both the Montague and Capulet households. More importantly, the term "plague" characterizes how much damage the feud has caused. The term "plague" can have a double meaning. Plague can refer to an epidemic disease that is causing a significant number of deaths (Random House Dictionary). In this sense, Mercutio is wisely stating the obvious that both households have a disease of the mind due to their longstanding hatred and the hatred, like a plague, is causing a significant number of deaths, like Mercutio's. But "plague" can also refer to a curse. In this sense, Mercutio is cursing the two households, meaning wishing that both households will be affected by "misfortune" or ill fate in consequence of his death as well as anyone else's death the feud has already caused (Shakespeare-online). Cursing the households also expresses his feelings concerning the feud--the feud has just taken his life; therefore, he very naturally and understandably sees the feud as despicable, something that Shakespeare wants the audience to see as well.