To begin, read a grade level book with the class and choose a couple key words from the story that can combine to form compound words. In this particular lesson, the book used is "Once There was a Bullfrog" by Rick Walton.
After you read the book, put a list of a few words on the board from the story and brainstorm some words to add that made compound words.
sun
snow
water
sand
lunch
Now it is time for students to come up with some compound words of their own. Give each student a piece of construction paper and have them tri-fold it so that the flaps meet in the middle. Cut the flaps into 5-6 strips.
Have the children draw and write the two words on each outside flap.
Example: cup on one flap, cake on the other.
Then they open the two flaps (think of barn doors) and on the inside they write the compound word and draw a picture of a cupcake.
Then the projects can be displayed on a bulletin board or tape them up somewhere so the kids can go over
and read the two words then open the flaps and see the compound word.
This lesson plan can be found at http://teachers.net/lessons/posts/4321.html
(pictures taken by Maria Santos)