So what does it mean that Nathanael asks, "Can anything good come out of Nazareth?" First of all, it's clear that Nazareth doesn't sound like a particularly impressive place. Bethlehem, the home of David and the city proclaimed to be the one from which the Messiah will come, would definitely sound more impressive. But Nazareth? He might as well be from anywhere.
The next day Jesus decided to go to Galilee. He found Philip and said to him, ‘Follow me.’ Now Philip was from Bethsaida, the city of Andrew and Peter. Philip found Nathanael and said to him, ‘We have found him about whom Moses in the law and also the prophets wrote, Jesus son of Joseph from Nazareth.’ Nathanael said to him, ‘Can anything good come out of Nazareth?’ Philip said to him, ‘Come and see.’ When Jesus saw Nathanael coming towards him, he said of him, ‘Here is truly an Israelite in whom there is no deceit!’ Nathanael asked him, ‘Where did you come to know me?’ Jesus answered, ‘I saw you under the fig tree before Philip called you.’ Nathanael replied, ‘Rabbi, you are the Son of God! You are the King of Israel!’ Jesus answered, ‘Do you believe because I told you that I saw you under the fig tree? You will see greater things than these.’ And he said to him, ‘Very truly, I tell you,* you will see heaven opened and the angels of God ascending and descending upon the Son of Man.’
Nathanael speaks his mind. Nothing wishy-washy about him. "Can anything good come out of Nazareth?" Tell me another one. But Jesus just seems to laugh. He doesn't correct him, or point out his real birthplace. No, this is a gospel about a different value system. Jesus says that Nathanael is "an Israelite indeed, in whom there is no deceit." Nathanael speaks his mind. And Jesus goes on to speak his own mind, and to tell Nathanael what he knows. He may not have heard the remark made to Philip, but he knows Nathanael through and through. And Nathanael is impressed enough to decide right then and there who Jesus is.
This is a story about what it means to be straightforward, to be honest, to have no deceit in oneself. There is Jesus who stands so far in truth that he knows people perhaps more deeply than they know themselves. We should not forget that it was in the previous text that he named Simon "Peter," the "Rock." Before he met Nathanael, he knew who he was, he'd peered into his soul. "In whom there is no deceit" is one whom Jesus already knew.
Can there be any good thing that comes from Nazareth? What we need to know is what there is in the heart.
Blessed are the pure in heart, for they shall see God.