Ever since Chomsky (1957) discussed Colorless green ideas sleep furiously, it has been evident that grammatical well-formedness of expressions is distinct from their being appropriate for use in a normal speech situation. In this paper, we seek to clarify the dividing line between the formal properties underlying grammatical well- formedness and the encyclopedic (real-world) knowledge that informs attitudes about pragmatic anomaly. We adopt a radically anti-lexicalist approach to grammar, following proposals of Halle & Marantz (1993) and Marantz (1997a). We detail how formal and encyclopedic properties are differentiated in this theory, and more specifically how vocabulary items are formally licensed for use, irrespective of their meaning properties. We then illustrate the advantages of our preferred theory through an analysis of English derived nominalisations.