In this paper we present a fully lexicalized grammar formalism as a particularly attractive framework for the specification of natural language grammars. We discuss in detail Feature-based, Lexicalized Tree Adjoining Grammars (FB-LTAGs), a representative of the class of lexicalized grammars. We illustrate the advantages of lexicalized grammars in various contexts of natural language processing, ranging from wide-coverage grammar development to parsing and machine translation. We also present a method for compact and efficient representation of lexicalized trees.