In Shakespeare's Macbeth, the line "Fair is foul, and foul is fair," is first said by the witches in Act 1.1, and then echoed by Macbeth in Act 1.3.
Literally, the line means that what appears to be fair, is actually foul, and vice-versa when Macbeth echoes it.
Figuratively, though, the line accomplishes much more than the revealing of the literal meaning. It introduces and contributes to themes revealed in the play, and also immediately reveals a connection between Macbeth and the witches.
At the time Macbeth utters the line, he is literally referring to the weather, as are the witches when they use it. Macbeth at this point in the play is a war hero and loyal protector of his king. The witches are grotesque and crass. Yet, the separate speakers of the line are connected when Macbeth uses it. This foreshadows their relationship.
Throughout the drama, what appears to be fair is often actually foul. Duncan says Cawdor appeared to be loyal, just as Macbeth appears to be loyal. Lady Macbeth warmly greets Duncan when he arrives at her castle, though she is planning on assassinating him. Macbeth appears to Banquo as his ally, but he orders his death. Macbeth is king, and appears to be telling the truth when he informs the murderers that it was Banquo, not Macbeth, who wronged them, but he is lying.
Even when fair is fair, it is suspected of being foul, as when Macduff is suspected of treachery by Malcolm.
Opposites also appear in the play, echoing this quote. The witches appear to be women, but have beards. Macbeth, the warrior, feels pity and guilt before and immediately after he kills Duncan, emotions more often associated with females. Lady Macbeth, on the other hand, asks to be unsexed, turned from female to male.
This single line introduces and contributes to much of what is revealed in the play.
This quote comes from the end of the first scene of the play. It is spoken by the witches. They are, in this case, giving a bit of a prophecy about how the play will go.
What they are saying is that things that seems fair (good) are really foul (bad). And things that seem foul are really fair. What this prophecy is supposed to do is to show that morals are going to be lost in this play. Everything is going to be up for grabs and the events of the play will really be confused and mostly evil.