This is a Fake Buddha Quote.
It seems to have a hybrid origin. The first part — “Awake. Be the witness of your thoughts.” — comes from Thomas Byrom’s “translation” of the Dhammapada. I put the word translation in quotes because Byrom’s rendering is less translation and more “look at the Pali original and make up something poetic vaguely based on what you see there,” as you’ll see below.
In this case the original Pali (Dhammapada verse 237) is:
Appamadarata hotha sacittam anurakkhatha.
A literal translation would be:
Be devoted to heedfulness. Guard your mind.
There’s no “awake.” There’s no “witness.” The root of the verb translated as “witness” is rakkh-, which means “to protect.”
The second part — “You are what observes, not what you observe” — seems to come from Robert Earl Burton’s Self-Remembering (1995), p. 23.
Byrom appears to have been a Hindu, and this may have affected his choice of words, which is rather non-Buddhist. In the Hindu tradition they talk about “witnessing consciousness.” You are not your thoughts, emotions, or other experiences. You are instead that which is aware of those experiences. That is your true Self, your atman. The Buddha’s approach was of course one of anatman, or not-self. One recognizes that neither our experiences nor what experiences (which is really just our experience of experiencing) is the self. Over and over in the Pali texts we’re told to note that “this is not me, this is not mine, this is not my self.” We are never told to identify anything as being the self. To the Buddha, any view of the self — even the view that there is no self — was a form of clinging that would lead to suffering. The ideal is to live free from any views on the self whatsoever.
Here’s a quote from the Sabbasava Sutta of the Middle Length Discourses. I’ve added emphases to highlight the important differences between our Fake Buddha Quote and the Buddha’s teaching:
In a person who thus considers improperly there arises one of the six [wrong] views. The view ‘I have self’ arises in him really and firmly. Or, the view ‘I have no self’ arises in him really and firmly. Or, the view ‘I perceive self through self’ arises in him really and firmly. Or, the view ‘I perceive non-self through self’ arises in him really and firmly. Or, the view ‘I perceive self through non-self’ arises in him really and firmly. Or, he has the view thus: ‘That self of mine speaks, knows and experiences the results of wholesome and unwholesome actions. That self of mine is permanent, stable, durable, incorruptible and will be eternal like all things permanent.’
Bhikkhus! This wrong view is called a false belief, a jungle of false beliefs, a desert of false beliefs, a thorny spike of false beliefs, an agitation of false beliefs and a fetter of false beliefs. Bhikkhus! The ignorant worldling who is bound up with the fetter of false beliefs cannot escape rebirth, ageing, death, grief, lamentation, pain, distress and despair. I declare that he cannot escape dukkha.
Burton, incidentally, was neither a Buddhist nor a Hindu but a teacher of the “Fourth Way” in the tradition of Gurjieff and Ouspensky.
I don’t know where, when, or how these two separate quotes became cobbled together, or how they became ascribed to the Buddha. But by 2008 the two are found combined in a book, Awake Joy: The Essence of Enlightenment, by Katie Davis, and presented as a Buddha quote. It’s likely that the amalgamation of the two quotes took place on the web, although we may never know.
This adoption of the “witness” as the self seems to be seen sometimes in certain Buddhist schools, such as the Tibetan Dzogchen and Mahamudra traditions, despite its being profoundly un-Buddhist. It’s also a feature of the teaching of the popular spiritual teacher Ekhart Tolle.