The author identifies semantics as the representation of meaning and pragmatics as the context dependent assignment of meaning, and discusses the issue of the scope of semantics and the difference between dictionary (decontextualized meaning) and encyclopedia (information about branches of knowledge).

He then divides this chapter into four sections. The first one is concerned with lexical semantics, in particular, componential analysis of lexemes and their semantic relations, semantic fields, semantic primes, and prototype (and stereotype) semantics. The next section discusses the semantics-(generative) syntax interface by Katz, and alternatives such as generative semantics, conceptual semantics, case/thematic roles, semantics and pragmatics in (functionalist) Role and Reference Grammar, and semantic frames and meaning in Construction Grammar.

The third section describes predicate (and propositional) logic and linguistic meaning, based on truth conditions and semantic components, as well as extensions and intensions, and includes semantic and pragmatic constraints on anaphora (as in Discourse Representation Theory). The last section deals with aspects of pragmatics, especially the role of context (including the context of use).

The chapter concludes with the importance of scripts (predictable personae and sequence of events) and conversational implicatures (inferences that arise from conventional expectations, allowing for understandable underspecification of meaning).