This popular saying comes from Psalm 46:10, “Be still, and know that I am God; / I will be exalted among the nations, / I will be exalted in the earth.”Psalm 46:10
Be still, and know that I am God: I will be exalted among the heathen, I will be exalted in the earth.
This verse comes from a longer section of Scripture that proclaims the power and security of God. While the threat the psalmist faced is not mentioned specifically, it seems to relate to the pagan nations and a call for God to end the raging war. Here is the whole psalm:
“God is our refuge and strength, an ever-present help in trouble. Therefore we will not fear, though the earth give way and the mountains fall into the heart of the sea, though its waters roar and foam and the mountains quake with their surging. There is a river whose streams make glad the city of God, the holy place where the Most High dwells. God is within her, she will not fall; God will help her at break of day. Nations are in uproar, kingdoms fall; he lifts his voice, the earth melts. The LORD Almighty is with us; the God of Jacob is our fortress. Come and see what the LORD has done, the desolations he has brought on the earth. He makes wars cease to the ends of the earth. He breaks the bow and shatters the spear; he burns the shields with fire. He says, ‘Be still, and know that I am God; I will be exalted among the nations, I will be exalted in the earth.’ The LORD Almighty is with us; the God of Jacob is our fortress.”
Notice that the majority of the psalm is written in the third person as the psalmist speaks about God. However, God’s voice comes through in verse 10, and the Lord speaks in the first person: “Be still, and know that I am God; I will be exalted among the nations, I will be exalted in the earth.”
Be still. This is a call for those involved in the war to stop fighting, to be still. The word still is a translation of the Hebrew word rapa, meaning “to slacken, let down, or cease.” In some instances, the word carries the idea of “to drop, be weak, or faint.” It connotes two people fighting until someone separates them and makes them drop their weapons. It is only after the fighting has stopped that the warriors can acknowledge their trust in God. Christians often interpret the command to “be still” as “to be quiet in God’s presence.” While quietness is certainly helpful, the phrase means to stop frantic activity, to let down, and to be still. For God’s people being “still” would involve looking to the Lord for their help (cf. Exodus 14:13); for God’s enemies, being “still” would mean ceasing to fight a battle they cannot win.
Know that I am God. Know in this instance means “to properly ascertain by seeing” and “acknowledge, be aware.” How does acknowledging God impact our stillness? We know that He is omniscient (all-knowing), omnipresent (present everywhere), omnipotent (all-powerful), holy, sovereign, faithful, infinite, and good. Acknowledging God implies that we can trust Him and surrender to His plan because we understand who He is.
I will be exalted among the nations, I will be exalted in the earth. It was tempting for the nation of Israel to align with foreign powers, and God reminds them that ultimately He is exalted! God wins, and He will bring peace. During Isaiah’s time, Judah looked for help from the Egyptians, even though God warned against it. Judah did not need Egyptian might; they needed reliance on the Lord: “In repentance and rest is your salvation, in quietness and trust is your strength” (Isaiah 30:15).
When we are still and surrendered to God, we find peace even when the earth gives way, the mountains fall (verse 2), or the nations go into an uproar and kingdoms fall (verse 6). When life gets overwhelming and busyness takes precedence, remember Psalm 46:1, “God is our refuge and strength, an ever-present help in trouble.” Run to Him, lay down your weapons and fall into His arms. Acknowledge that He is God and that He is exalted in the earth. Be still and know that He is God.
original by: http://www.gotquestions.org/be-still-and-know-that-I-am-God.html
Be still - The word used here - from רפה râphâh - means properly to cast down; to let fall; to let hang down; then, to be relaxed, slackened, especially the hands: It is also employed in the sense of not making an effort; not putting forth exertion; and then would express the idea of leaving matters with God, or of being without anxiety about the issue. Compare Exodus 14:13, "Stand still, and see the salvation of God." In this place the word seems to be used as meaning that there was to be no anxiety; that there was to be a calm, confiding, trustful state of mind in view of the displays of the divine presence and power. The mind was to be calm, in view of the fact that God had interposed, and had shown that he was able to defend his people when surrounded by dangers. If this the divine interposition when Jerusalem was threatened by the armies of the Assyrians under Sennacherib, the force and beauty of the expression will be most clearly seen.
And know that I am God - See, in what I have done, the evidence that I am God. See a work accomplished which none "but" God could effect. Compare Isaiah 37:36.
I will be exalted among the heathen - That is, among the nations. The nations abroad that do not worship me, but worship idols, shall see in these deeds full proof that I am the true God, and that I am worthy of universal adoration. Compare the notes at Daniel 3:28-29; notes at Daniel 4:1-3, notes at Daniel 4:37. See also Exodus 9:16; Romans 9:17.
I will be exalted in the earth - In the lands abroad; all over the world. The defeat and destruction of the armies of Sennacherib were eminently suited to make a deep impression on the world that the God of the Hebrew people was the true God.