This paper investigates the use of sublexical units as a solution to handling the complex morphology with productive derivational processes, in the development of a lexical functional grammar for Turkish. Such sublexical units make it possible to expose the internal structure of words with multiple derivations to the grammar rules in a uniform manner. This in turn leads to more succinct and manageable rules. Further, the semantics of the derivations can also be systematically reflected in a compositional way by constructing PRED values on the fly. We illustrate how we use sublexical units for handling simple productive derivational morphology and more interesting cases such as causativization, etc., which change verb valency. Our priority is to handle several linguistic phenomena in order to observe the effects of our approach on both the c-structure and the f-structure representation, and grammar writing, leaving the coverage and evaluation issues aside for the moment.