The process of deriving substantives from adjectives in the classical Indo-European languages can be accomplished in two fundamentally different ways. The first possibility is a derivational one, i.e. the adjective is substantivized by a word-formation process that typically consists of an overt morphological or morphonological operation such as suffixation, accent shift, introduction of new ablaut grades, or a combination thereof. The second process, on the other hand, is a gradual one: an adjective can be substantivized through the ellipsis of a head noun that this adjective was originally paired with. In this paper, I intend to outline the differences and similarities between these two mechanisms and discuss their role in the interpretation of Proto-Indo-European stems in *-(e-)h2-.