To start, you will need your outside and inside fabrics. Just make sure you have 2 rectangles of each, and cut them to the same size, at least a foot wide and a foot and a half long. You're also going to want some sort of cord. Here, I'm using clothesline. The trim section of your fabric store has an endless collection of things you can choose.
The first thing you will do is measure about an inch in from the bottom outside corners of your outer fabric only. Sew a couple of button holes there. If you don't like button holes, you can do rivets. Next, pin both pieces of your backpack together with right sides facing each other and sew them. It's important to remember to leave about an inch from the top unsewn only on the left side. Turn right side out.
Next, make your lining. I just wanted to make a very plain and basic knapsack, so I picked a cotton muslin and chose not to put any pockets, loops or pouches in it. I just sewed it at the sides and bottom, with right sides together. Make sure you insert your rope into the button holes before you sew in your lining. Just go in one and out the other.
I inserted the lining into the backpack, tucked the edges in and pinned, then machine stitched about 2 millimeters from the edge.
Sew 8 button holes along the top hem, about an inch from the edge. Bring your rope up and weave them into the button holes. The side of the rope that comes from the right side (with the bottom button holes facing you), will go up and into the top hole on the right side, out, in, and out the far left hole. Pull the rope, so that when you have the knapsack open, the rope is slack but does not have excess, and trim it. You will then tuck the end into the gap that you left on that side when you sewed the two outer pieces together.
The rope that comes out of the left side, will go into the first hole on the left (into the same hole that the right side of the rope comes out of), and then flip the knapsack over. Weave that part of the rope in and out of the holes on that side. Pull and trim it to fit.
You can take a pair of scissors and cut a slit into the lining, then tuck the end of the rope into it and sew it down.