A bone handle is made from cattle shin bone, cut into scales, usually dyed and often textured. It is the traditional handle material on American slip-joint pocket knives and it is what most Case knives are built with.
Bone is dense, takes dye well, and grips better than polished metal or smooth synthetics. It is stabilized and finished before use, so it is far more stable than raw bone would be.
Most bone handles are textured rather than smooth. See jigged bone for the traditional patterned finish.
Bone moves very slightly with humidity, which is why a bone-handled knife sometimes feels a fraction proud of its bolsters in a dry winter and flush again in summer. That is normal on traditional construction and not a defect.
Keep it out of prolonged water and out of a dishwasher. A wipe and an occasional light oil is all it needs.
The term is not academic here. 78 of the products currently on our shelves describe this feature in their own manufacturer specifications, across 4 of the nine brands we stock. Examples in stock right now include Case Vietnam War Trapper Gift Set, Case Trapper Stained Glass, Case Trapper Stained Glass Angel.
Everything below is pulled live from the catalog, so what you see is what is actually in the Woodlawn warehouse today.