Formal:
* "Sto bene, grazie." (Stoh beh-neh graht-see-eh) This is the most common and polite way to say it.
Informal:
* "Bene, grazie." (Beh-neh graht-see-eh) This is a more casual way to say it, suitable for friends and family.
Adding a little extra:
* "Sto benissimo, grazie." (Stoh behn-ee-see-moh graht-see-eh) This means "I'm very well, thank you."
* "Sto bene, grazie a te/a voi." (Stoh beh-neh graht-see-eh ah teh/ah voy) This means "I'm fine, thank you to you" (singular/plural). This is a polite way to acknowledge the other person's inquiry.
Remember, Italian is a gendered language. However, the way you say "I'm fine" doesn't change based on gender.