dṛṣṭvā tam ātmanas tulyaḿ
veṣaḿ kṛtrimam āsthitam
yathā naṭaḿ rańga-gataḿ
vijahāsa bhṛśaḿ harīḥ
drishtva -- seeing; tam -- him; atmanah -- to His own; tulyam -- equal; vesham -- in dress; kritrimam -- imitation; asthitam -- arrayed; yatha -- like; natam -- an actor; ranga -- a stage; gatam -- entered upon; vijahasa -- laughed; bhrisam -- strongly; harih -- Lord Krishna.
Srila Prabhupada describes this scene as follows: "On the whole, [Paundraka's] dress and makeup were clearly imitation. Anyone could understand that he was just like someone on a stage playing the part of Vasudeva in false dress. When Lord Sri Krishna saw Paundraka imitating His posture and dress, He could not check His laughter, and thus He laughed with great satisfaction."
Srila Jiva Gosvami points out that it was a benediction from Lord Siva that enabled Paundraka to imitate the Lord's dress and appearance exactly -- a fact gleaned from the Uttara-khanda of Sri Padma Purana.