The knight arrives unarmed, and King Arthur assumes he is there to battle. But instead, he is there to present a challenge.
“If any man holds himself, here in this house, so hardy, so bold in his blood-and so brainless in his head-that he dares to stoutly exchange one stroke for another, I shall let him have as my present those lovely gisarme” (lines 65-68).
Sir Gawain takes the challenge for King Arthur, and he beheads the Green Knight.
“Sir Gawain laid hold of the ax and he hefted it high, his pivot foot thrown forward before him on the floor, and then, he slashed at the naked neck.” (lines 146-148)
The Green Knight calls on Sir Gawain to keep his word and meet him at the Green Chapel where the Green Knight will deliver an equal blow to Sir Gawain's neck.
“Look that you go, Sir Gawain, as good as your word, and seek till you find me, as loyally, my friend, as you’ve sworn in this hall to do...Come to Green Chapel, I charge you, and take a stroke the same as you’ve given, for well you deserve” (lines 172-176)
The Green Knight takes a swing at Sir Gawain.
“Quickly, then the man in the green made ready, Grabbed up his keen-ground ax to strike at Sir Gawain; with all the might in his body he bore it aloft and sharply brought it down as if to slay him” (lines 241-244).
The Green Knight spares Sir Gawain.
“It hurt him no more Than to nick the nape of his neck...I owed you a stroke, and I’ve struck; consider yourself well paid” (lines 291-320).
The Green Knight and the Lord do not hold Sir Gawain's actions against him, forgiving him of his sins. They give him tokens for his chivalry, and they let him leave as an equal
“Whatever harm I’ve had, I hold it amended since now you’ve acknowledged sins and bearing the plain penance of my point...And I give you, sir, this gold-embroidered girdle, for the cloth is as green as my gown” (lines 367-378).