The five-string Finnish kantele is a traditional folk music instrument that has unique structural features, resulting in a sound of bright and reverberant timbre. This article presents an analysis of the sound generation principles in the kantele, based on measurements and analytical formulation. The most characteristic features of the unique timbre are caused by the bridgeless string termination around a tuning pin at one end and the knotted termination around a supporting bar at the other end. These result in prominent second-order nonlinearity and strong beating of harmonics, respectively. A computational model of the instrument is also formulated and the algorithm is made efficient for real-time synthesis to simulate these features of the instrument timbre.