Given the fact that the vocabulary of a language is constantly enriched to express new objects or concepts and actions or states of being, this article identifies and discusses the different strategies employed by Degema in the creation of words. The article notes that the word creation strategies employed by Degema include affixation, compounding, reduplication, borrowing, clipping and semantic extension. Affixation, compounding, borrowing and semantic extension are observed to be more widespread in the language than reduplication and clipping, which is more commonly found in proper nouns. In addition, the article notes that apart from having a meaning- distinctive function in homonymous lexemes, and the fact that deverbal nouns, such as agentives, gerundives and state nouns, seem to be characterised by the presence of a high-downstepped-high tone pattern which interacts with other word creation processes, tone plays a comparatively minor role in word creation in Degema. A significant observation that this article makes, and which has cross-linguistic implications, is that it is difficult to draw a neat line between inflection and derivation, as certain prefixes and circumfixes in Degema not only create new words, which is a derivational function, but also mark number, which is an inflectional function.