Chinese characters are formed in four main ways: pictographs, indicatives, ideatives and harmonics.

Pictographs are characters describing an object's shape. For instance, the character 日 looks like the sun; 月, the moon; 山, a hill; and 鹿, a running deer.

Indicatives refer to characters that employ a kind of sign to suggest a certain meaning. For instance, the character 刃 is formed by adding a point to the knife-edge (刀 means knife) which means the blade. The simple characters 一, 二 and 三 indicate the numbers one, two and three respectively. The characters 本 and 末 refer to the root and the top of a tree (木 means tree) respectively. There are only a few of indicatives among Chinese characters. Pictographs and indicatives are both one-element characters.

Ideatives are formed by combining simple elements (that are usually characters themselves) to provide new meanings. For instance, 休 (rest) consists of 人 (person) and 木, which means a person is leaning against a tree: i.e., he/she is taking a rest. 明 (bright) is combined with two elements: 日 and 月; 林 (wood) and 森 (forest) consist of two and three 木s respectively to indicate many trees; 采 (pick) is composed of 爪 (originally, hand) and 木 to mean picking fruit on a tree with hands. Ideatives are compound characters. Pictographs, indicatives and ideatives do not have components indicating sound and they all belong to characters that indicate meanings.

Harmonics are characters that consist of one component indicating pronunciation and the other indicating meaning. This method of word formation breaks away from the creation of words that just indicate meaning, making the formation of characters much easier. More than 90 percent of Chinese characters are formed this way.