The so-called Caucasian Albanian Palimpsest kept in St. Catherine's Monastery on Mt. Sinai for the first time allows to draw a comprehensive picture of one of the languages (probably the state language) of the third medieval Christian kingdom in Transcaucasia, namely (Caucasian) Albania. The relevant parts of the two palimpsest manuscripts (Sin. N 13 and N 55) covering roughly 120 pages (that is two thirds of the two manuscripts) have been deciphered, interpreted, and translated in the course of an international project running since 2003. The Caucasian Albanian texts comprise a) fragments of a Lectionary, and b) parts of the Gospel of John, written by a different hand in a different style. A number of both text-internal and text-external arguments suggest that the original manuscripts were produced in the 7th century A.D. The analysis of the texts clearly argues in favour of the assumption that the translators relied upon corresponding Old Armenian sources. Nevertheless, it can be shown that the texts in parts deviate from those Old Armenian Bible texts that have survived to our days, so that Georgian, Greek, and Syriac sources must also be taken into account. The readable passages of the two texts furnish us with roughly 8,000 word tokens (some 1,000 lemmatised lexical entries). Hence, the Caucasian Albanian palimpsest gives a considerable insight into the lexicon, grammar, and phonology of its language, which can now safely be identified as an early variant of Udi (East Caucasian, Lezgian). Caucasian Albanian (or Old Udi) differs from present-day Udi in a number of features, including an additional set of palatalised consonants, a more conservative system of local case markers, gender distinction within the set of anaphoric pronouns, and a stronger tendency to construe larger clitic chains. The lexicon is marked for three aspects: a) the preservation of Lezgian terms lost in present-day Udi; b) a set of loans from Armenian and (less prominent) from Georgian; c) loan translations especially from Armenian. The syntax of the texts comes close to that of its sources; however, the texts also exhibit a number of syntactic features alien to both Armenian and Georgian. This suggests that the translators tried to find a balance between the preservation of the original wording of the sources and the necessity to meet the needs of the Caucasian Albanian speaking audience.