Excerpted from Widepedia: The Red Pill
The red pill and its opposite, the blue pill, are popular culture symbols representing the choice between embracing the sometimes painful truth of reality (red pill) and the blissful ignorance of illusion (blue pill).
The terms, popularized in science fiction culture, are derived from the 1999 film The Matrix. In the movie, the main character Neo is offered the choice between a red pill and a blue pill. The blue pill would allow him to remain in the fabricated reality of the Matrix, therefore living the “ignorance of illusion”, while the red pill would lead to his escape from the Matrix and into the real world, therefore living the “truth of reality” even though it is a harsher, more difficult life.
In The Matrix, Neo (Keanu Reeves) hears rumors of the Matrix and a mysterious man named Morpheus. Neo spends his nights at his home computer trying to discover the secret of the Matrix and what the Matrix is. Eventually, another hacker, Trinity (Carrie-Anne Moss), introduces Neo to Morpheus.
Morpheus (Laurence Fishburne) explains to Neo that the Matrix is an illusory world created to prevent humans from discovering that they are slaves to an external influence. Holding out a capsule on each of his palms, he describes the choice facing Neo:
This is your last chance. After this, there is no turning back. You take the blue pill—the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill—you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember: all I’m offering is the truth. Nothing more.