Monkey knife is a quest item in the quest Do No Evil. The wise monkeys will ask for the knives in order to protect the colony. They can be pickpocketed from a Monkey knife fighter on Ape Atoll after they have been knocked out. You will need to be in gorilla form to do this. Note that it is not guaranteed that you will receive this item every pickpocket, you may receive coins instead. A total of 6 monkey knives are needed in the quest.