The first major distinction that must be made when evaluating word knowledge is whether the knowledge is productive (also called active) or receptive (also called passive) and even within those opposing categories, there is oftentimes no clear distinction. Words that are generally understood when heard or read or seen constitute a person's receptive vocabulary. These words may range from well known to barely known (see degree of knowledge below). In most cases, a person's receptive vocabulary is the larger of the two. For example, although a young child may not yet be able to speak, write, or sign, he or she may be able to follow simple commands and appear to understand a good portion of the language to which he or she is exposed. In this case, the child's receptive vocabulary is likely tens, if not hundreds of words but his or her active vocabulary is zero. When that child learns to speak or sign, however, the child's active vocabulary begins to increase. It is possible for the productive vocabulary to be larger than the receptive vocabulary, for example in a second-language learner who has learned words through study rather than exposure, and can produce them, but has difficulty recognizing them in conversation.

Productive vocabulary, therefore, generally refers to words which can be produced within an appropriate context and match the intended meaning of the speaker or signer. As with receptive vocabulary, however, there are many degrees at which a particular word may be considered part of an active vocabulary. Knowing how to pronounce, sign, or write a word does not necessarily mean that the word has been used to correctly or accurately reflect the intended message of the utterance, but it does reflect a minimal amount of productive