The Nix expression in is a function; it is missing some arguments that have to be filled in somewhere. In the Nix Packages collection this is done in the file pkgs/top-level/all-packages.nix, where all Nix expressions for packages are imported and called with the appropriate arguments. Here are some fragments of all-packages.nix, with annotations of what they mean: ... rec { ① hello = import ../applications/misc/hello/ex-1 ② { ③ inherit fetchurl stdenv perl; }; perl = import ../development/interpreters/perl { ④ inherit fetchurl stdenv; }; fetchurl = import ../build-support/fetchurl { inherit stdenv; ... }; stdenv = ...; } This file defines a set of attributes, all of which are concrete derivations (i.e., not functions). In fact, we define a mutually recursive set of attributes. That is, the attributes can refer to each other. This is precisely what we want since we want to plug the various packages into each other. Here we import the Nix expression for GNU Hello. The import operation just loads and returns the specified Nix expression. In fact, we could just have put the contents of in all-packages.nix at this point. That would be completely equivalent, but it would make the file rather bulky. Note that we refer to ../applications/misc/hello/ex-1, not ../applications/misc/hello/ex-1/default.nix. When you try to import a directory, Nix automatically appends /default.nix to the file name. This is where the actual composition takes place. Here we call the function imported from ../applications/misc/hello/ex-1 with a set containing the things that the function expects, namely fetchurl, stdenv, and perl. We use inherit again to use the attributes defined in the surrounding scope (we could also have written fetchurl = fetchurl;, etc.). The result of this function call is an actual derivation that can be built by Nix (since when we fill in the arguments of the function, what we get is its body, which is the call to stdenv.mkDerivation in ). Nixpkgs has a convenience function callPackage that imports and calls a function, filling in any missing arguments by passing the corresponding attribute from the Nixpkgs set, like this: hello = callPackage ../applications/misc/hello/ex-1 { }; If necessary, you can set or override arguments: hello = callPackage ../applications/misc/hello/ex-1 { stdenv = myStdenv; }; Likewise, we have to instantiate Perl, fetchurl, and the standard environment.