In context, the line reads like this:

Life’s but a walking shadow, a poor player
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

At this point in the plot, Macbeth is losing his sanity and has just lost his wife. Everything seems to be quickly spinning out of control and toward his doom. Life looks ominous and meaningless after all his seemingly futile efforts to come out on top via the schemes he has played.

Life, then, is a tale. A story. Each person is the protagonist of their own life story, choosing the direction the plot will take. Macbeth notes that this protagonist writing the tale is an "idiot." This refers to the way people tend to move through life, strutting upon the stage they are given, not realizing that their time is like the brief flame of a candle. It is all so fleeting, and individuals spend their brief "hour" of life full of sound and fury. For what? Against whom? In the end, none of the fury that consumes so much of life amounts to anything.

Macbeth realizes that he has wasted so much of his brief life (and, by extension, all of us do as well) and that it has all proven meaningless in the end.

What does this quote from Macbeth mean: "Life is a tale told by an idiot"?

In act 5, scene 5, Macbeth is informed that his wife is dead before he fights his final battle against Malcolm and Macduff. Macbeth responds by saying that his wife would have died someday and that the unfortunate news was bound to come. Macbeth then contemplates time by mentioning that days creep by until the end of recorded history and each day that passes brings fools that much closer to death. Macbeth then famously says,

"Life’s but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing." (Shakespeare, 5.5.24-28)

Macbeth's perspective on life is melancholy and dark as he compares life to a "walking shadow," meaning that life is empty and has no substance. He then compares man to a "poor player," who struts on a stage and worries for an hour before he is never heard from again. Macbeth's analogy portrays human existence as futile, trivial, and transient. He goes on to compare a man's life to a "tale told by an idiot" that is chaotic and meaningless. Essentially, Macbeth is expressing his dark view on life, which he believes is futile, meaningless, and temporary. He has come to terms with his demise and has nothing to look forward to before he participates in the final battle.

In Macbeth, what does "a tale told by an idiot" signify?

This line is taken from act 5, scene 5, towards the end of Macbeth. At this point, we have already seen Macbeth's murderous rise to power and are already watching the confluence of events that will bring about his fall.

The full monologue is spoken after Macbeth learns of the death of his wife, Lady Macbeth. To present a portion of the text:

And all our yesterdays have lighted fools / The way to dusty death. Out, out brief candle! / Life's but a walking shadow, a poor player / That struts and frets his hour upon the stage / And then is heard no more: it is a tale / Told by an idiot, full of sound and fury, / Signifying nothing.(Shakespeare, Macbeth, Act 5, Scene 5)

As can be see from the text, life's essential nature is the subject of his musings. I'd suggest that, in large part, he is reflecting in the context of wife's demise. He himself is on the tale end of this entire bloodthirsty road that has brought the both of them up to this point. Now, as that road is unraveling, Macbeth is finding that life itself is feeling hollow.

The question arises from these powerful lines as to who the "idiot" telling the "tale" is. For Macbeth, now fallen to his moral depths, "it" signifies "nothing" and is life mentioned a few lines earlier: "Life's but a walking shadow, a poor player/That struts and frets his hour upon the stage...."

... it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing. (V.v)

The "it" that is a "tale" and also a "walking shadow"is "Life."

I suggest that the "tale" told by "an idiot," a tale consists of those dark forces that tempted him to murder to begin with. The witches told a tale--or suggested to him the possibilities of power and revealed to him his own ambition--that in the long run lacked meaning. Earlier the play associates "equivocal" with the witches; in these lines they no longer equivocate, they simply lack meaning--they are a lie.