TThe principal way of forming words in Estonian is by adding derivative affixes to the stem. Estonian has about one hundred derivative affixes, almost all of them (there are two exceptions: eba-, and mitte- 'un-', 'non-', 'in-') are suffixes.

The notion of Estonian as an agglutinative language as far as morphology is concerned, is rather popular. The agglutinative type of language is characterised by the fact that the morphemes bearing grammatical information are joined to word stems, and every such morpheme has only one meaning. In reality, Estonian is rapidly moving away from agglutination and closer to inflection where each morpheme has several grammatical meanings. Estonian differs from its closest neighbour - Finnish (which is agglutinative) - by numerous features. Some scholars have even claimed that Latvian, an Indo-European language and thus unrelated to Estonian, is in fact closer typologically than closely related Finnish.