The aim of this paper is to build an upper-level ontology of artifacts. To this end, two formal tools are employed: theory of consequence operation and ontology of states of affairs. It is argued that the adequate representation of an artifact consists of the representation of the artifact’s purposes, the representation of its design, the representation of the background knowledge according to which it has been designed, and the representation of instructions of use relevant for that artifact. I submit a series of constraints to be satisfied if our production and use of artifacts are to be rational activities. Since mereology is claimed to be an important part of every theory of artifacts, I sketch a few preliminary remarks on the prospects of formulating the mereology for the functional parthood. In particular, I explain why the principle of transitivity, the axiom of general sum, and the supplementation principles are false for that relation. Finally, the ontology of artifacts is evaluated against the desiderata formulated by P. Vermaas and W. Houkes for theories of artifact functions.