A new model of the family of CRAC models, CRAC:EPII (Cosmic Ray Atmospheric Cascade: Electron Precipitation Induced Ionization), is presented. The model calculates atmospheric ionization induced by precipitating electrons and uses the formalism of ionization yield functions. The CRAC:EPII model is based on a full Monte Carlo simulation of electron propagation and interaction with the air molecules. It explicitly considers various physical processes, namely, pair production, Compton scattering, generation of bremsstrahlung high‐energy photons, photoionization, annihilation of positrons, and multiple scattering. The simulations were performed using GEANT 4 simulation tool PLANETOCOSMICS with NRLMSISE 00 atmospheric model. The CRAC:EPII model is applicable to the entire atmosphere. The results from the simulations are given as look‐up table representing the ionization yield function. The table allows one to compute ionization due to precipitating electrons for a given altitude and location considering a given electron spectrum. Application of the model for computation of ion production during electron precipitation events using spectra from balloon‐borne measurements is presented.