configure
. Текущий параметр можно достать отсюда: txt.config()['show'][-1]
from tkinter import *
def show_password():
current_state = txt.config()['show'][-1]
if current_state == '*':
txt.configure(show='')
else:
txt.configure(show='*')
window = Tk()
window.title("title")
txt = Entry(window,width=10, show='*')
txt.grid(column=1, row=0)
btn1 = Button(window, text="Показать пароль", command=show_password)
btn1.grid(column=3, row=0)
window.mainloop()