This study inquires into the 'place' word-formation has in grammar. It develops a model in which the grammatical regularities of word-formation are derived not from morphology-specific rules but from syntactic restrictions and principles. The model is substantiated by theoretical considerations and concretized and empirically verified with reference to selected derivation and compounding phenomena. Proof is produced to show that both descriptively and conceptually a syntactic approach to word-formation is superior to the widely held assumption of an autonomous morphology component.