If you want my advice, ignore the two other solutions, as neither will obtain you the achievement.
To get this to pop, you must alert the cops/guards and become hostile. Then you must get out of sight, and change your disguise.
Then just wait for you to return to a calm state.
You do not need to enter a hiding place, or blend in with an object. There are other achievements for that. You simply need to lose your heat by changing your disguise. Not sure why other guides didn't mention that.
It can be obtained on any level, but for a real easy way :
Load level 2, the king of Chinatown.
Walk to the drug dealers alley, and kill the cop at the bottom. Shoot a few civilians until you are hostile and the cops are shooting at you.
Run upstairs to the drug dealers flat, and kill him. Then steal his disguise.
From here do what you want, hide, enter a closet, or just walk past all the cops back into Chinatown.
The achievement will pop up as soon as it goes calm.