Since it is a made up phrase, there have been several interpretations as to its meaning based on possible origins.
First, the script writer for lone ranger used it to mean "trusted scout," it was a term of endearment.
If it comes from the Yavapai term "kinmasaba" or "kinmasabeh" it means "one who is white."
The Ojibwe word `giimoozaabi' (pronounced like kemo sabe) means `to peek' but is used in reference to a scout.
According to some people Tonto means "Stupid" and kemo sabe is Tonto's reply to the insulting name "he who knows nothing." This is based on a rough translation of the spanish phrase "qui no sabe"