O, beware, my lord, of jealousy;
It is the green-ey'd monster, which doth mock
The meat it feeds on. That cuckold lives in bliss,
Who, certain of his fate, loves not his wronger:
But O, what damnèd minutes tells he o'er
Who dotes, yet doubts, suspects, yet strongly loves!
Othello:Othello Act 3, scene 3, 165–171
The notion that jealousy is green-eyed is probably older than Shakespeare, although Shakespeare is our earliest authority in print. In The Merchant of Venice, Portia refers to "green-eyed jealousy" (Act 3, scene 2), and here Shakespeare coins the more intense phrase "green-ey'd monster." Renaissance Englishmen often paired colors with emotions or personal qualities: both green and yellow are emblematic of jealousy, and green is also emblematic of envy. Some colors are associated with the bodily fluids or "humors" thought to make up the temperament; green and black were the colors attributed to bile.
Iago's basic idea is that the fortunate man knows his wife is cheating; the unfortunate man only suspects it, and is caught between the jaws of affection and anxiety. History and Shakespeare's infinity of cuckold jokes testify that Renaissance men were particularly prone to suspect their wives. The social perils of cuckoldry were severe indeed: it ruined a man's credit and debased his wife. Such consequences produced an advanced state of jealous suspicion known as "horn-madness," named after the metaphorical horns that were supposed to sprout from the cuckold's brow.