ENIn this article the Baltic system of compounding will be presented and its relation to the well attested Proto–Indo–European system of nominal compounding will be sought. The different types have enjoyed different degrees of productivity and the system will be traced back, via East and West Baltic, to Proto–Baltic. It will also be shown that the Lithuanian accentuation of nominal compounds follows certain regular patterns. Finally, the fate of the composition vowel will be discussed and a tendency to delete this vowel in initially stressed compounds will be argued for.