We examine the difference between expected earthquake rates inferred from the historical earthquake catalog and the geologic data that was used to develop the consensus seismic source characterization for the state of California [California Department of Conservation, Division of Mines and Geology (CDMG) and U.S. Geological Survey (USGS) Petersen et al., 1996; Frankel et al., 1996]. On average the historic earthquake catalog and the seismic source model both indicate about one M 6 or greater earthquake per year in the state of California. However, the overall earthquake rates of earthquakes with magnitudes (M) between 6 and 7 in this seismic source model are higher, by at least a factor of 2, than the mean historic earthquake rates for both southern and northern California. The earthquake rate discrepancy results from a seismic source model that includes earthquakes with characteristic (maximum) magnitudes that are primarily between M 6.4 and 7.1. Many of these faults are interpreted to accommodate high strain rates from geologic and geodetic data but have not ruptured in large earthquakes during historic time. Our sensitivity study indicates that the rate differences between magnitudes 6 and 7 can be reduced by adjusting the magnitude-frequency distribution of the source model to reflect more characteristic behavior, by decreasing the moment rate available for seismogenic slip along faults, by increasing the maximum magnitude of the earthquake on a fault, or by decreasing the maximum magnitude of the background seismicity. However, no single parameter can be adjusted, consistent with scientific consensus, to eliminate the earthquake rate discrepancy. Applying a combination of these parametric adjustments yields an alternative earthquake source model that is more compatible with the historic data. The 475-year return period hazard for peak ground and 1-sec spectral acceleration resulting from this alternative source model differs from the hazard resulting from the standard CDMG–USGS model by less than 10% across most of California but is higher (generally about 10% to 30%) within 20 km from some faults.