In this paper we outline a lexical organization for Turkish that makes use of lexical rules for inflections, derivations, and lexical category changes to control the proliferation of lexical entries. Lexical rules handle changes in grammatical roles, enforce type constraints, and control the mapping of subcategorization frames in valency-changing operations. A lexical inheritance hierarchy facilitates the enforcement of type constraints. Semantic compositions in inflections and derivations are constrained by the properties of the terms and predicates. The design has been tested as part of a HPSG grammar for Turkish. In terms of performance, run-time execution of the rules seems to be a far better alternative than pre-compilation. The latter causes exponential growth in the lexicon due to intensive use of inflections and derivations in Turkish.