Abstract: A knife and sheath assembly includes a sheath defining therein a knife accommodation portion; an engagement and release unit including a pivot hole pivotally coupled to said sheath, and operating portion and an engagement portion; a knife including a cutter blade insertable into the knife accommodation portion, a grip, a plurality of retaining grooves arranged in series on a back side thereof between the cutter blade and the grip for engagement with the engagement portion of the engagement and release unit in a selective manner. In an alternate form, the knife and sheath assembly includes a sheath defining a knife accommodation portion, a guide-in portion and a guide-out portion, and a knife including a cutter blade insertable into the knife accommodation portion, a grip, a guide-in edge for engagement with the guide-in portion of the sheath and a guide-out edge for engagement with the guide-out portion of the sheath.