The curve number (CN) method was developed more than half a century ago and is still used in many watershed/water quality models to estimate direct runoff from a rainfall event. Despite its popularity, the method is plagued by a conceptual problem 10 where CN is assumed to be constant for a given set of watershed conditions, but many field observations show that CN decreases with event rainfall (P). Recent studies indicate that heterogeneity within the watershed is the cause of this behavior, but the governing mechanism remains poorly understood. This study shows that heterogeneity in initial abstraction, I a , can be used to explain how CN varies with P. By conventional definition, I a is equal to the cumulative rainfall before the onset of runoff, and is assumed to be constant for a given set of watershed conditions. Our analysis shows that the total storage in I a 15 (I aT ) is constant, but the effective I a varies with P, and is equal to the filled portion of I aT, which we call I aF . CN calculated using I aF varies with P similar to published field observations. This motivated modifications to the CN method, called Variable I a Models (VIMs), which replace I a with I aF . VIMs were evaluated against Conventional Models CM0.2 (λ = 0.2) and CMλ (calibrated λ) in their ability to predict runoff data generated using a distributed parameter CN model. The performance of CM0.2 was the poorest whereas those of the VIMs were the best in predicting overall runoff and watershed heterogeneity. 20VIMs also predicted the runoff from smaller events better than the CMs, and eliminated the false prediction of zero-runoffs, which is a common shortcoming of the CMs. We conclude that including variable I a accounts for heterogeneity and improves the performance of the CN method while retaining its simplicity.