Searching for context on this quote, I found this from Dr John Gerstner, whom I highly respect:

‘Scott Hahn, in his deliverance on the radio, did refer to a very criminal statement on the part of Martin Luther, that he could commit adultery several different times a day and still be justified by faith alone. Luther had an unhappy way, and very graphic manner, of expressing certain convictions which, when taken literally, are not only horribly anti-Christian, but are also horribly anti-Martin Luther. He wrote two dissertations against the Antinomianism which was troubling the Lutheran movement in his day, as Scott Hahn and his students of the Reformation know very well. The statement cited by Hahn was just an inexcusable but unforgettable way of Luther’s trying to say that his works, or his morality, was not the foundation of justification by faith alone. While doing research recently at St Vincent College in Latrobe, PA, I read a recent Roman Catholic writer who said: “Luther never meant that a habitual adulterer, murderer, liar, could be justified by faith alone. Otherwise he would not have opposed Karlstadt, Agricola and other easy-believers of his time”’ (Gerstner, JH, Rome Not Home in Justification by Faith Alone, Soli Deo Gloria, 1995, p. 176).

Arrgh.

I had an answer all typed up, but Matthew came up and sat in my lap. He loves to press the button with the blue light on it at the back of the keyboard. So he turned off my computer. With all the pop-up Windows and helper-bots that Bill Gates insists we put up with for the privilege of using his software, I don't see how there's not something to ask to make sure I want to turn off the computer. Because it never wants to turn off when I want it to-- it will have trouble closing some malcontent piece of software and sit there twiddling its thumbs until I give it the okay.

Anyway, from what I've read, the point of that remark is this.

Sin is a serious thing, and it is very real. If you live in this world, you will sin. You cannot avoid it. That's just the way the world is. So don't be afraid to live just because you know you'll end up sinning. When a situation comes up in which you must sin to get through it, charge ahead, knowing that Christ has won the victory over sin and this world.

There's always a danger in interpreting enigmatic statements like this-- it's too easy to make the author come out thinking like you do. So keep that in mind as you try to make sense of it. But as for me, although I agree with much of his sentiment, I don't agree that sinning is an unavoidable part of living in this world. I see God's creation as good, even post-fall, and I see sin as arising from within us, not the external world (James). Also, the notion that sinning is part of living in this world would contradict the notion of Christ's sinless life.

I had always heard this as "if you must sin, sin boldly"....which would give it a different connotation and not imply that sinning is inevitable.

I had always taken it to mean "if you're going to trade the truth of God for a counterfeit, don't do it gingerly, do it boldly - to feel the full weight of your own heart's betrayal rather than lying to yourself and pretending its ok.....I guess I'm going to have to rethink it.....As Alan points out, I'm probably just bringing my own viewpoint to bear on this....

This was written by Luther in a letter to Philip Melanchthon. Comment 1 here pretty much touches the jist of what is going on. It is hyperbole to indicate that the blood of Jesus is capable of washing away any sin.

And before we get reckless about chastizing Luther posthumously for his language, remember that he was a man of his times. Language was used in a much more straightforward and often abrasive way when compared with our own times where we are afraid we may hurt someone's feelings. This can be seen in the writings of others of that era and not just Luther alone. Try reading Luther's into to "The Bondage of the Will" sometime. Poor Erasmus. Let's exercise a little grace here.

Now I realize that lots of people over the years have had fun with this statement. However, this may be stepping over the line:

http://www.oldlutheran.com/Merchant2/merchant.mvc?Screen=CTGY&Category_Code=SB

You can find some more context for it here and here.

Interesting, because my point of disagreement with Luther is glaring in one translation and absent in another. Compare this:

If you are a preacher of grace, then preach a true and not a fictitious grace; if grace is true, you must bear a true and not a fictitious sin. God does not save people who are only fictitious sinners. Be a sinner and sin boldly, but believe and rejoice in Christ even more boldly, for he is victorious over sin, death, and the world. As long as we are here we have to sin. This life is not the dwelling place of righteousness but, as Peter says, we look for new heavens and a new earth in which righteousness dwells. It is enough that by the riches of God's glory we have come to know the Lamb that takes away the sin of the world. No sin will separate us from the Lamb, even though we commit fornication and murder a thousand times a day [that's not a recommendation! T.W.] Do you think that the purchase price that was paid for the redemption of our sins by so great a Lamb is too small? Pray boldly--you too are a mighty sinner. (Luther's Works, 48:281-282)

We will commit sins while we are here, for this life is not a place where justice resides.

I agree with the last couple posts. As I understand it, Melanchthon was a rather melancholic personality, the kind of man likely to be paralyzed by the fear of making a mistake and falling into sin. Luther was telling him not to let that kind of fear prevent him from serving God with boldness, humbly accepting the fact that the results will never be perfect.

Yeah, the context seems to be fairly significant. For me, I see Luther as using an 'affirming the consequent' type argument (i.e A therefore B; Not B, therefore Not A). If we are to deny the existence of sin, or at least the seriousness of sin, then the logical conclusion is to deny grace. Which would then be to engender the 'fictitious' grace he refers to. God is only truly glorified when the threat He saves us from is real. Is it an injunction? I would say no, it is more like a case of introspection, how one should look back at the sin in our lives (and also in a sense look forward, owing to the inevitable nature of our sinning, as per Alan's comments). We shouldn't minimise what sin is and our identity as sinners but rather cling to this, because only in that realization do we more desperately cling to the cross. It reminds me of the early verses of Ephesians 2, where Paul can underscore God's supererogatory love evidenced in our salvation by first underscoring our wrath-deserving status.

Sorry, I meant 'denying the consequent' (not 'affirming the consequent' as that form of argument is clearly fallacious). 2am comments; not a good idea.

It means: embrace your illegitimacy. Stop trying to be legitimate--you can't. The notion of religious respectability is thoroughly worldly; it is a fruit of original sin to seek to make ourselves legitimate. The Gospel of grace puts our illegitimacy right up to our nose and even frees us to relish it.

It means: don't substitute the ease of judgment, decision and disinterested contemplation for the risk of action. As Kierkegaard wrote in 1846--

The present age is one of understanding, of reflection, devoid of passion, an age which flies into enthusiasm for a moment only to decline back into indolence. (...)

The individual (no matter how well-meaning he might be, no matter how much strength he might have, if only he would use it) does not have the passion to rip himself away from either the coils of Reflection or the seductive ambiguities of Reflection; nor do the surroundings and times have any events or passions, but rather provide a negative setting of a habit of reflection, which plays with some illusory project only to betray him in the end with a way out: it shows him that the most clever thing to do is nothing at all. (...)

Action and passion is as absent in the present age as peril is absent from swimming in shallow waters.

I think everything I had to say was covered already, and with more academic rigor.

For me, I see the quote as particularly important in light of our modern times and their encouragement of timidity. It means that sometimes, it's more important to be a leader than to make sure you do nothing wrong; to boldly act and boldly ask for forgiveness and allow God to change me, rather than timidly trying to make sure everything is perfect before doing anything.

This is actually my favorite Luther quote. The way I've always heard it (and wasn't sure of the source -- thanks Greg) is this: "Sin boldly, but cling to and rejoice in Christ more boldly still." Someone once told me that it originates with Augustine. I've always taken it to be a sort of carpe diem statement, that because of God's grace we can plow boldly forward (like ML himself?), following the Spirit's lead, and trust that God's mercy and grace through Jesus' sacrifice will cover our weakness and failings (sins) in the process.

Also, the Latin sounds cool: Pecca fortiter sed fortius fide et gaude in Christo.

I think it is about avoiding the "become a Christian and your life will be a bed of roses" mentality. We will sin, and we shouldn't lie and say that Christians don't sin. We shouldn't, but the reality is that we do. When we screw up, we should "'fess up."