Loose lips sink ships is an American English idiom which means:
Don't talk carelessly because you don't know who is listening.
(From wartime. Literally, "Don't reveal even the location of a loved one on a ship, because the location could be communicated to the enemy by a spy.")
The War Advertising Council's "Loose Lips Sink Ships" public service ads reminding Americans of the dangers of revealing too much information are still remembered today.
The phrase originated on propaganda posters during World War II. The phrase was created by the War Advertising Council and used on posters by the United States Office of War Information.
The posters were part of the general campaign of American propaganda during World War II and were part of a campaign to advise servicemen and other citizens to avoid careless talk concerning secure information that might be of use to the enemy. The British equivalent used variations on the phrase "Keep mum".
The gist of this particular slogan was that one should avoid speaking of ship movements, as this talk (if directed at or overheard by covert enemy agents) might allow the enemy to intercept and destroy the ships.
There were many similar such slogans, but "Loose lips sink ships" remained in the American idiom for the remainder of the century and into the next, usually as an admonition to avoid careless talk in general.
Source(s): wikipedia, thefreedictionary.com, adcouncil.org,