This is a pastoral painting depicting idealized shepherdss from classical antiquity, clustering around an austere tomb. Thus the phrase is in fact a memento mori, and can be interpreted two different ways, either "I, Death, am also in Arcadia;" or "I used to dwell in Arcadia as well." The sentiment was meant to set up an ironic contrast by casting the shadow of death over the usual idle merriment that the nymphs and swains of ancient Arcadia were thought to embody.
The painting, measuring 122 by 85 cm, is in the Louvre in Paris and also goes under the name "Les bergers d'Arcadie". Poussin made several monochrome and at least one polychrome draft version on this theme before giving us this famous rendition. The sheperds were less serene in some of these other versions.