"For in Scripture it says: 'See, I lay a stone in Zion, a chosen and precious cornerstone, and the one who trusts in him will never be put to shame.'" NIV translation
Here, Peter quotes from the book of Isaiah the prophet. Isaiah told of the day that Jesus would come and the fact that, when we trust in Him, we will be saved and lifted up. He uses building terms as the people of Isaiah's day could understand building the physical temple. The promise of this verse is for us today as well in that we will not be put to shame when we trust in Jesus as the Cornerstone of our relationship with God.
"Now to you who believe, this stone is precious. But to those who do not believe, 'The stone the builders rejected has become the capstone,' and, 'A stone that causes men to stumble and a rock that makes them fall.' They stumble because they disobey the message-which is also what they were destined for." NIV translation
This passage refers to a tradition about the building of the Temple and we must remember that God had instructed the builders that they were not to shape the stone at the site.
It is said that, when the Temple was being built, they brought a large stone up the mount from the quarry to the site. The stone would not fit anywhere and so they set it aside (rejected it). When all of the other stones were put into their places, there was a large hole left at the top corner of the Temple. They retrieved the stone that they had set aside and it was a perfect fit to the spot at the top corner of the Temple. This final stone is called the capstone or the cornerstone.
We can see in this tradition, as well as in this passage, a beautiful picture of Jesus and the salvation He offers as He became the Temple. In the last part of this passage, it tells of the rejection of Jesus Christ as the Messiah. It tells of how Christ can either be a stepping stone for you from where you are to a right relationship with God or cause you to stumble if you reject God's grace through Jesus. Many stumble because it is 'too easy" and we as people want to contribute something to our salvation but we must simply accept the gift and trust in Jesus.
"But you are a chosen people, a royal priesthood, a holy nation, a people belonging to God, that you may declare the praises of him who called you out of darkness into his wonderful light." NIV translation
WOW! What a wonderful basket of gifts from God are contained in this one verse. We are a "chosen people" and He picked us even when we were enemies of God and going our own way. It is only by His grace and mercy and nothing of ourselves. We are a "royal priesthood" and have access to God because of our right relationship with Him through Jesus Christ. This allows us to serve Him with the authority of God. We are a "holy nation" and we are called to be different (set apart) because we are His. We are a "people belonging to God" as we were purchased by the blood of Jesus Christ. Since we are His, He will take care of us and we know that we are His because of the Holy Spirit living inside of us. We also see our purpose in all of this which is to "declare the praises of him" and that includes every aspect and event of our lives.