The present study examined the types of linguistic knowledge that affect children's ability to understand and produce novel compounds in Hebrew. Sixty children aged 3;0–9;0, and 12 adults, were asked to interpret and to produce novel Noun + Noun compounds. Their comprehension was in advance of their production. In comprehension, morphological form of head nouns had little effect: from age four, children did equally well on all the compound forms tested; they identified head nouns and also possible relations between heads and their modifiers. In production, though, knowledge of morphological form was crucial. The fewer the changes children had to make in the forms of head nouns, the earlier they mastered that compound pattern. Finally, children who produced novel compounds correctly were also able to interpret novel compounds, but not vice versa.