The Grail Knight's book was a large Bible kept and read by the Grail Knight, who guarded the Holy Grail at the Temple of the Sun. It contained illuminated borders and artwork to accompany its hand-lettered text.
In 1938, Indiana Jones had entered the Grail sanctuary to find the knight reading the Bible, which rested on a stone table. When the knight felt Jones' presence he stopped reading, grabbed his sword, and tried to strike Jones. Unfortunately, the knight's strength had passed through the centuries, and he fell backward upon his manuscript.
Behind the scenes
The manuscript prop, known as "Grail Knight's book" measures 32 x 25 x 6 cm. An examination of the text on the page shown indicates that the prop is likely not a Bible as it uses the word Kamaalot (the old French word for Camelot) thrice, indicating that perhaps it is a book of Arthurian tales. The text on the bottom half of the left-side page is identical to the text on the bottom half of the right-side page, though the illuminated letters are painted differently. The first line of each page is also the same text. 
Correspondence with Lucasfilm staff yielded this resolution: The book should be a Bible, though the prop itself re-uses text from the prop of the Friar's manuscript, which used text from an Arthurian romance in Old French. The prop was not designed to be scrutinized. Additional support for this is shown in the film as the Knight is shown kneeling while he is reading, as in prayer.
- From Star Wars To Indiana Jones - The Best of the Lucasfilm Archives
- Indiana Jones: The Ultimate Guide (refers to Grail Knight's book as a Bible)