"It must be understood that neither by word nor deed had I given Fortunato cause to doubt my good-will. I continued, as was my wont, to smile in his face, and he did not perceive that my smile now was at the thought of his immolation." (Poe)

Montresor is determined to keep his real intentions well guarded behind a smile of friendship.  He does not want to reveal any of his anger or true feelings to Fortunato.  He does not want to tip him off that there is anything other than friendship between them.  

His smile hides his deep hatred of Fortunato, the smile is significant because it indicates that Montresor has no feelings regarding taking Fortunato's life.  He has set in motion a premeditated murder.  His ability to pretend, is cold and calculating, it ties in with Poe's setting of the story, the whole carnival atmosphere and the wearing of costumes. 

He has thought of a plan, a way to get Fortunato to walk to his own death without any struggle, no ordeal, no violence.  He will lure him into the catacombs with the temptation of a rare Amontillado, a rare wine, very special.  He uses Fortunato's reputation as a connoisseur of fine wine to get his cooperation.