First of all - This quote is always attributed to Aristotle and yet it was never written by Aristotle. This quote is from Will Durant's The Story of Philosophy, published in 1926, and it's Durant's distillation of Aristotle's thought in Aristotle's work The Nichomachean Ethics.
What it means is simply this: We ARE that which we do. Our actions define who we are. If we want to be excellent at something then we must do that thing repeatedly until we excel at it. For example: if you wanted to be a really great basketball player but all you did was sit and watch other people play basketball and you, yourself, never picked up a ball, you would wind up becoming an excellent basketball-watcher but not at all an excellent basketball player, nor a player of any kind.
Aristotle believed that the purpose of human life was to attain happiness (`Eudaimonia' in Greek, which means to be possessed of a good spirit) and that the way to attain happiness was to strive for personal excellence (`Arete' in Greek, which is translated as Virtue in English but means something much closer to `personal greatness'). So if you repeatedly played basketball until you achieved your personal excellence in that sport, making it a habit to practice that sport, you would then become an excellent basketball player.
That's what the quote means. And, again, it was NEVER said/written by Aristotle - it's from Durant - but it does neatly sum up Aristotle's thought. All the best to you....
Philosophy Professor specializing in ancient Greek Philosophy