The circumstances surrounding that treaty are extremely complicated, I will do my best to give you a concise, helpful answer without re-writing one of my capstone papers:

Hitler and the Nazis were well aware that their ideologies (the return of lands lost in the aftermath of WWI, uniting all other ethnic-Germans into one state and annexing lands to the east for living space) would mean that they would have to fight another general war in Europe. France and Great Britain were clearly their main foes, as the Soviet Union was not considered to be a major player by either side in the run up to the conflict.

In WWI, Germany had absolutely crushed the Russian Empire and contributed greatly to the conditions that resulted in the fall of the Tsar and the rise of the Bolsheviks. Since then, the Russians had fought a brutal civil war, saw the rise of totalitarianism under Stalin, and experienced mass famine, arrests and purges. To the other European powers, the Soviet Union seemed to be struggling to function as a state altogether, and otherwise seemed to be in no position to fight any war. However, Stalin saw the writing on the wall, the Nazis were very open and clear in their belief that Bolshevism and Jewry were one and the same and could not coexist with Nazism. Therefor he many numerous attempts to nail out an ironclad military alliance with France and Great Britain.

But the Nazis were not the only ones who were wary of the communists. The Russian revolution, as most of Europe saw, wasn't about the Tsar or Russia specifically but rather the destruction of capitalism everywhere it is being practiced. Since all of Europe was "capitalist" at least by the Bolshevik standard, they felt extremely threatened, and were very motivated to contain, not encourage, the spread of Communism. Add these views of the Soviet State with the aforementioned perceived political, economic and military chaos, Great Britain and France frankly didn't think the Soviets would participate in the next war, and would be more of a burden than a help if they did. For these reasons, Stalin was left on the eve of war without any solid alliances, and became more open to last-minute options.

For as much as they swore themselves arch enemies, the Soviets and the German government had been cooperating since the end of WWI out of necessity. The Versailles treaty prevented Germany from operating any Tank or air units or developing doctrine, so they agreed with the Soviets in 1929 to set up a training facility in the Soviet Union where, ironically, they developed many of the Blitzkrieg tactics that would later be used against them in 1941. In exchange, the Soviets received help with their industrial efforts and 5 year plans through the sharing of technologies. The Germans, additionally, needed huge amounts of resources from the Soviet Union to build and then maintain their new armies. The Germans additionally suspected the Royal Navy would construct a naval blockade like they did in the First World War, so resources over land from the Soviet Union would become even more essential when the war broke out. It was strongly in Germany's interest to keep friendly with the Soviets until they dealt with the more formidable Western Allies.

The Germans saw Stalin, rejected by the allies, in no position to go to war, and friends with nobody. They saw an opportunity to Guarantee the Soviets would not side with the Allies, to secure their resource channels until the moment they saw fit, and to create an element of surprise when they decided to strike. The treaty, at the time, mutually benefited both countries, and Stalin was relieved to know he had at least bought his country some time to prepare for eventual entry in the war.

However, as we all know, Germany breaking the pact with Operation Barbarossa might be the most successful surprise attack in history. Its reported that Stalin, arguably the most paranoid man in history, was not seen or heard from for weeks after the event he was so shook to his core.

Hope this helps!

Sources: Rabinbach, Anson. The Third Reich Sourcebook. Univ. of California Press, 2013.

Hoisington, Thomas H., et al. Stalinism As a Way of Life. 2000.