W.rd f.rmati.n is a ~.ce.s of cre~tin9 neww.rds fr •• existingrn•••••• Deriyat1.n &allc:eapeundlDt are the _st c-.n prec••••• etrnwerd f.rm.ti.n.rn:In this .twly, an atteapt is .ade t. d.scri»e sueh weN f.r •• ti.nrnprocesses in Oromo. The aain body of the paper has two parts.rnIn the first part derviational pt'ocesses are described. It is shownrnthat different lexieal eateqori.. are derived by adding yariou.rnaffixes to bases belonging to different lexical categories; and thatrnthe addition of the affixes entails different properties of phonology,rnmorphology, syntax and semantics.rnIn the second part, the process of compoundingis desCribed.rnIt is shownthat different lexical categories are formedby combiningrntwo words or stems; and that such a process also entails differentrnphonological, aorphological. syntactic and aeaantic characteristics.rnFurtheraor., the gaps to be found in the eoabinatlon ofrndifferent lexical categories in word formation of the language arernexplained.