The line "fair is foul and foul is fair" is from the play "Macbeth" by William Shakespeare, and it means that what appears to be beautiful is actually ugly, and vice versa. The play centers around themes of deception.
This famous line appears in Act I, Scene I of the play, and is spoken by three witches called the Weird Sisters.
The lead male character, Macbeth, encounters these witches and they plant the idea in his head that he deserves to be king. This leads him later to commit murder and eventually he is killed for his actions.
Many characters in the play deceive each other, so what is "fair" is really "foul." In turn, things that seem terrible are actually good things, and "foul" is "fair."