The Grail Knight is one of three knights who is sworn to protect the Holy Grail. He was the one left behind, and drank from the correct grail. He stayed in the temple to retain immortality, and survived for 700 years.
The Grail Knight read the Bible facing an altar with lots of gold and silver, jewel-embedded fake grails. He explains to Indy, Elsa Schneider, and Donovan that they must choose the correct Grail, as choosing the wrong one would kill them.
In the beginning of Indy's encounter with the Knight, he attempts to attack him, but his strength failed, and he surrendered the care of the grail to the strangely dressed knight who conquered him: Indy.
In LEGO Indiana Jones: The Original Adventures, The Grail Knight is shown in a battle on all platforms except the Nintendo DS. He carries the sword he tries to attack Indy, and wears a cape on his back, with the symbol of the BOTCS on his chest. He can only be played as and bought on the Nintendo DS, the Nintendo Wii, PC and the Play Station 2. This character is vital to the Last Crusade story because of the explanation above.