All linguists recognize that competence in a natural language involves knowledge of a lexicon or dictionary; most assume that it also involves knowledge of a grammatical system. Just where the boundary between the lexicon and the grammar lies, however, is a question on which there is little consensus. This problem arises in particular with regard to the field of morphology, with many morphologists taking all morpheme combinations to result from the operation of the syntactic computational system and many others assuming that morphological units like stems and words are either lexically listed or created by nonsyntactic means. The present study, using Japanese and Ryukyuan verbal morphology as its primary database, argues that evidence from the syntactic branch of the grammar and evidence from the phonological branch of the grammar converge on the conclusion that, while inflectional morphology is fully syntactic, derivational morphology has properties that militate against a syntactic treatment. The boundary between grammar and lexicon, then, falls at the boundary between inflection and derivation, rendering morphology “split” between syntactic and nonsyntactic subparts. The book should be of interest not only to morphologists, but to all concerned with the distinction between grammatical and lexical competence.