Sir Gawain and the Green Knight is the story of how Sir Gawain, a knight of King Arthur’s court, is tested by a mysterious knight. Gawain’s nemesis is gigantic, and his skin, clothing, and horse are completely green. So the title is largely descriptive.
Sir Gawain was one of the most popular and well-known knights of the Arthurian legends. He appears in more stories than any other knight of the round table –more than even Galahad, Lancelot, or Tristan. Gawain is the son of King Lot of Orkney and King Arthur’s sister Morgause, making Gawain Arthur’s nephew. This definitely gives Gawain an "in" with the king.
In earlier Arthurian tales, Gawain comes off as a paragon of knightly virtue and prowess. He’s the guy who cleans up the messes of boorish knights like Sir Kay and picks up the slack when other knights fail. In the later Arthurian tradition, Gawain’s character does become more ambiguous, even flawed. However, in Sir Gawain and the Green Knight he’s definitely still the great Sir Gawain. In this story, Gawain enjoys a reputation not only for his knightly virtue, but also as a master of well-mannered romance, or courtly love.
The other title character in the tale, the Green Knight, may be a compilation of a few different characters from earlier folktales who similarly initiate a "beheading game." In the earliest one, the Old Irish Bricriu’s Feast, the character convinces three knights to submit to an exchange of blows only to have them all balk at the critical moment; that is, until the famous Old Irish hero Cú Chulainn submits and is rewarded for his bravery.
Other tales that feature the character include the Middle French Life of Caradoc and later French romances The Girl with the Mule and Hunbaut. In all of these tales, the character’s basic role is the same: he challenges a knight (or knights) to an exchange of blows, volunteering to go first. When he somehow mysteriously survives his head being chopped off, the knights either turn chicken and reveal their lack of knightly honor or, like Cú Chulainn and Gawain, prove their honor and bravery by submitting to the axe. What’s unique to Sir Gawain and the Green Knight, though, is that this knight is completely green, a detail that may represent his connection to nature or the supernatural.