This dissertation investigates nominalization and possession in Formosan languages from a functional-typological perspective, where nominalization is a metonymic process of creating denoting expressions. Two types of nominalization are each the topic of the two primary parts of this study. Verbal-based nominalization characterizes a nominal in terms of a salient event and the nominal denotes that event as a whole (event nominalization) or participants in it (argument nominalization). Nominal-based nominalization produces a nominal with respect to a salient entity such that denotations of the former bear crucial relevance to the latter. Special attention is paid to nominalizations lacking a lexical status, covering constructions traditionally called relativization and possession. In almost all Formosan languages, the semantic role of an argument nominalization is determined by a small set of affixes on a morpho-lexical class of Focus-words. Conservative languages demonstrate up to four grammatical categories of Focus-words, marked by two broad sets of affixes (Set I and II) reconstructible in the Proto-Austronesian (PAn) period. Focus-words with Set II predominantly have both predicate and argument functions, which has been explained in terms of a historical reanalysis whereby erstwhile nominalizations were reinterpreted as default verbs, thus marginalizing the use of those with Set I, which are considered verbal throughout the Austronesian history. However, it is argued that Focus-words with both Set I and II can equally constitute argument nominalizations, both subject to the same grammatical restrictions, be it within or across languages. The new analysis suggests PAn was a language employing the gap strategy for argument nominalizations, thus rendering superfluous the question of how or when the nominalization-into-verb reanalysis took place. The second part explores possessive NPs, and identifies three structural types that are constructionally and paradigmatically defined. The literature shows vigorous interest in the possessor-possessum syngtam, but generally overlooks phrases including the possessor but denoting the possessum instead (called possessive substantives). Possessive substantives in Formosan are important because they expose different syntactic functions of so-called genitive markers across languages even when cognate forms are involved. Moreover, distributions of cognate forms across the three types reveal clues to their possible historical developments.