This paper accounts for the derivation of two types of denominals in Modern Mandarin under the framework of Lexical Argument Structure that is initiated by Hale and Keyser (1993, 2002, inter alia). The first type is derived with an internal argument such as in ni qiang (“to smear mud on the wall to strengthen it”). The second type, on the other hand, is derived without any internal arguments such as in hen jiaoqu (lit. “very suburb”). It has been observed that the first type of denominals is no longer productive in Modern Mandarin. In contrast, the usage of the second type in Modern Mandarin is on the rise. It is argued that while the first type of denominals is derived in a fashion similar to denominals in English, the second type is derived in a way that is peculiar to Modern Mandarin. The low productivity of the first type of denominals is attributed to the drastic decline of V-PP structure in Modern Mandarin and this hypothesis is supported diachronically by Archaic/Classic Chinese.