Anas bin Malik narrated that:
A Jew came to the Prophet of Allah and his Companions and said: "As-Samu Alaikum (Death be upon you)." So the people replied to him. The Prophet of Allah said: "Do you know what this person said?" They said: "Allah and His Messenger know better – he said the Salam – O Allah's Prophet." He said: "No, rather he said like this and that. Bring him back for e=me." So they brought him back and he said: "Did you say As-Samu Alaikum? He said: "Yes." So with that Allah's Prophet said: "When one of the People of the Book gives you the Salam, then say: "Alaika Ma Qulta (Whatever you said to you too)." He said: 'And when they come to you, they greet you with a greeting wherewith Allah greets you not.'
English reference: Vol. 5, Book 44, Hadith 3301
Arabic reference: Book 47, Hadith 3614