The Book of KND is a mysterious book, created by an unknown hand, that was discovered by the legendary Numbuh 0 (Monty Uno) inside the Secret Treehouse of Coolness. Through this book, Numbuh 0 defeated his father, the tyrannical Grandfather; he then placed the book back where he found it, before having his own house built over it before Sector V grew their treehouse.
The book is said to contain the greatest secrets of past Kids Next Door operatives, mission information, battle plans, etc. It also seems to have some measure of mysterious power, since Monty Uno was able to at least partially resist his father's aging powers, something which he credited to the book being in his pocket. However, its true power lies in its ability to inspire children with the ideals of the KND, giving them hope to rebel against adult oppression. Grandfather described the book's contents as "the kind of hope that only snot-nosed kids are stupid enough to believe in", admitting that it empowers kids to a level beyond his own considerable power.
After Father recommissioned him, Grandfather realized that the hope represented by the Book of KND was what led to his previous downfall; thus, his ultimate goal (apart from world domination) was to extinguish that hope from existence. To this end, he not only resolved to find and destroy the book itself, but he also began transforming everyone on the planet into Senior Citi-zombies that would be completely loyal to him and unable to use the book. However, Numbuh 1 - the son of Numbuh 0 - recommissioned his father and retrieved the Book of KND from its hiding place. Numbuh 0 would carry the book in his back pocket as he confronted Grandfather, its power somehow protecting him from the villain's age-ifying touch. Eventually, Grandfather realized the book was right under his nose and snatched it from his son, only to find out that the entire struggle was a distraction; in the interim, Numbuh 1 returned to the KND Moon Base and arranged the pieces of Grandfather's final defeat.
After the crisis, the Book of KND was given to Numbuh 1, to write his own story as he had always dreamed. His contribution was a mere five words: "We Are Kids Next Door".