During Christmas dinner at King Arthurs court, a Green Knight appeared with an axe and challenged the knights. Sir Gawain volunteered to take up the challenge and chopped off the head of the Green Knight. The Knights were amazed when the Green Knight didn't die. Instead, he picked up his head and said that Sir Gawain must meet him in one year and one day to let the Green Knight strike him with his axe in return.
A year later Sir Gawain set out to find the Green Chapel which was the home of the Green Knight. He fought many monsters and was relieved to see a castle in the middle of the magical forest. A Lord and his Lady welcomed him and invited him to stay for Christmas. After the feast, the Lord suggested a game. Each day he would hunt and then he and Sir Gawain would exchange anything they had won.
The next morning the lord set out hunting while Sir Gawain slept in. When Gawain woke up the Lady of the castle was there. The Lady said she would only believe he was the famous ladies man Sir Gawain if he kissed her. So Sir Gawain did. That night the Lord gave Gawain the deer he had hunted and Gawain gave the Lord his kiss. This happened for the next two days with Gawain receiving kisses and swapping them for what the Lord had caught.
On the last day of the game, however, the lady convinced Gawain to accept a "lover’s token": a green girdle/belt, which she said would make the person wearing it not able to be killed. Gawain realized that this could save his life during his meeting with the Green Knight. When the lord of the castle came home at the end of the day, Gawain broke the rules of the game and didn't give him the green girdle and kept it for himself.
The next morning Gawain left to find the Green Knight's chapel. When he found it the Green Knight walked out holding his axe. He thanked Gawain for keeping his promise from the previous Christmas. He went to strike Sir Gawain twice but hesitated. The third time he cut Gawain's neck but did not kill him. The Knight revealed to Gawain he was actually the Lord of the Castle, called Sir Bertilak who was under a spell from a sorceress.
Sir Bertilak explained that the first two misses were because Gawain had exchanged the kisses. The cut was because he had not given him the girdle but because he had done it to save his life he would forgive him. He gave him the girdle as a reminder. Sir Gawain felt shamed that he had broken his agreement. He went back to Arthurs court and told the story. However, the knights laughed and said they would also from then on wear a girdle to make him feel better.