— Albert Einstein German-born physicist and founder of the theory of relativity 1879 - 1955
"On the Method of Theoretical Physics" The Herbert Spencer Lecture, delivered at Oxford (10 June 1933); also published in Philosophy of Science, Vol. 1, No. 2 (April 1934), pp. 163-169., p. 165. [thanks to Dr. Techie @ www.wordorigins.org and JSTOR]
There is a quote attributed to Einstein that may have arisen as a paraphrase of the above quote, commonly given as “Everything should be made as simple as possible, but no simpler,” "Everything should be made as simple as possible, but not simpler", or “Make things as simple as possible, but not simpler.” See this article from the Quote Investigator http://quoteinvestigator.com/2011/05/13/einstein-simple/ for a discussion of where these later variants may have arisen.
The original quote is very similar to Occam's razor, which advocates that among all hypotheses compatible with all available observations, the simplest hypothesis is the most plausible one.
The aphorism "everything should be made as simple as possible, but no simpler" is normally taken to be a warning against too much simplicity and emphasizes that one cannot simplify things to a point where the hypothesis is no more compatible with all observations. The aphorism does not contradict or extend Occam's razor, but rather stresses that both elements of the razor, simplicity and compatibility with the observations, are essential.
The earliest known appearance of Einstein's razor is an essay by Roger Sessions in the New York Times (8 January 1950) http://select.nytimes.com/gst/abstract.html?res=F30615FE3559137A93CAA9178AD85F448585F9, where Sessions appears to be paraphrasing Einstein: “I also remember a remark of Albert Einstein, which certainly applies to music. He said, in effect, that everything should be as simple as it can be, but not simpler.”
Another early appearance, from Time magazine (14 December 1962) http://www.time.com/time/magazine/article/0,9171,872923,00.html: “We try to keep in mind a saying attributed to Einstein—that everything must be made as simple as possible, but not one bit simpler.”