2 cups fresh basil leaves, packed
1/3 cup freshly grated Parmesan-Reggiano or Romano cheese 
1/2 cup extra virgin olive oil (...the best quality you can find!*) 
1/4 cup pine nuts or walnuts
3 medium sized garlic cloves, minced
salt and freshly ground black pepper to taste

Combine the basil and nuts in a food processor and pulse a few times. Add the garlic, pulse a few times more. Slowly add the olive oil in a constant stream while the food processor is on. Stop to scrape down the sides of the food processor with a rubber spatula. Add the grated cheese and pulse again until blended. Add a pinch of salt and freshly ground black pepper to taste. 

*NOTE: The quality of your olive oil is very important! While pesto is one of my favorite flavors, I've tasted many a pesto made with inferior oil that ruins the entire batch.