"Fair is foul and foul is fair," first uttered by the witches in Act 1, Scene 1, is a paradox that sets the stage for the entire play. At its most basic, it means that "good is bad and bad is good." In the context of the play itself, it means that things that are good are also bad and vice-versa. For example: Macbeth's murder of King Duncan is good for Macbeth, as it leads him to become the kind of Scotland, but bad for King Duncan. To continue to explore this particular example: Macbeth's reign is initially good for him and Lady Macbeth, but bad for the country. In Act 4, Scene 3, Macduff complains of Macbeth's rule, stating that "Each new morn / New widows howl, new orphans cry, new sorrows / Strike heaven in the face," thus revealing that conditions in Scotland grow increasingly worse under Macbeth's rule (5-7). Even this very scene is representative of another way in which the "fair is foul" motif is present. In this scene, Macduff is in England, attempting to persuade Malcolm, the rightful king, to return to Scotland to fight against Macbeth. Some believe that Macduff has "fled" to England because he is a coward (foul), when in reality he has left because he is willing to risk his own safety to fight against Macbeth (fair). Further, Malcolm is initially suspicious that Macduff is working for Macbeth, and has come to England to trick Malcolm into returning so that Macbeth can kill him (foul). Because of this, he pretends to be worse than Macbeth (foul) but in reality he is loyal to Scotland (fair) just as Macduff truly is (fair).
Unsurprisingly, Shakespeare does a masterful job of weaving this motif upon itself throughout Macbeth. Macbeth's act of regicide is initially fair for him and his wife, but becomes foul as the guilt of the act grows, combining with Macbeth's own paranoia and eventually leading to his downfall. This is just one of many ways in which it appears, but it is one of the best examples to demonstrate the intricacy of the "fair is foul" concept.