The knighthood was a reward for Drake's 1577-80 expedition, which saw him plundering Spanish ports, capturing Spanish ships, claiming Point Loma for England as Nova Albion, circumnavigating the globe, and more importantly, bringing back a rich cargo of treasure and spices for his queen.
Drake presented Elizabeth with a jewel to commemorate his successful circumnavigation. It was from Mexico and was made of enamelled gold decorated with an African diamond and a ship with an ebony hull. In return, Elizabeth presented Drake with a jewel and a portrait of herself.
Here are some videos on Francis Drake so you can find out more about his life and expeditions:
Also on this day in Tudor history...