Let's quote the passage from a more-modern English translation:
There is no fear in love, but perfect love casts out fear. For fear has to do with punishment, and whoever fears has not been perfected in love. We love because he first loved us. If anyone says, “I love God,” and hates his brother, he is a liar; for he who does not love his brother whom he has seen cannot love God whom he has not seen. And this commandment we have from him: whoever loves God must also love his brother.—1st John 4:18-21 (ESV)
The highlighted section seems to refer back to something Jesus said:
And behold, a lawyer stood up to put him to the test, saying, “Teacher, what shall I do to inherit eternal life?” He said to him, “What is written in the Law? How do you read it?” And he answered, “You shall love the Lord your God with all your heart and with all your soul and with all your strength and with all your mind, and your neighbor as yourself.” And he said to him, “You have answered correctly; do this, and you will live.”
But he, desiring to justify himself, said to Jesus, “And who is my neighbor?”—Luke 10:25-29 (ESV)
Other times, it's Jesus who explains that loving God and loving our neighbor are tied together. But in Luke, we get Jesus' explanation of who our neighbor is: it is anyone, even our enemies. The Samaritan, who shows mercy to a victim of highway robbery, illustrates that we ought to love even our enemies.
But in the context of 1st John, "brother" has a more local definition according to the NET Bible notes:
Grk “his brother.” Here the term “brother” means “fellow believer” or “fellow Christian” (cf. BDAG 18 s.v. ἀδελφός 2.a). In the repeated uses of this form of address throughout the letter, it is important to remember that sometimes it refers (1) to genuine Christians (those who have remained faithful to the apostolic eyewitness testimony about who Jesus is, as outlined in the Prologue to the letter, 1:1-4; an example of this usage is 2:10; 3:14, 16), but often it refers (2) to the secessionist opponents whose views the author rejects (examples are found here at 2:9, as well as 2:11; 3:10; 3:15; 3:17; 4:20). Of course, to be technically accurate, in the latter case the reference is really to a “fellow member of the community”; the use of the term “fellow Christian” in the translation no more implies that such an individual is genuinely saved than the literal term “brother” which the author uses for such people. But a translation like “fellow member of the community” or “fellow member of the congregation” is extremely awkward and simply cannot be employed consistently throughout.
Conclusion
John emphases that Jesus called his followers to love even their enemies. Therefore, the sign of a genuine Christian is that they continue to show love even to people who are opponents to the church. That doesn't mean to treat our enemies equal to our true brothers, however.
