Green is the traditional color of Islam. The Arabic script is the Shahada, the Islamic declaration of faith ('There is no god but Allah; Muhammad is the Messenger of Allah'). The sword represents strictness in applying justice.
History
The Shahada has been used on flags in the region since the 18th century. The sword was added in 1902 by Ibn Saud. The current standardized form was adopted in 1973.
Construction
A 2:3 ratio. A green field with white Arabic script above a white horizontal sword (pointing to the hoist). The flag is identical on both sides so the text reads correctly from right to left.