  We describe new planetesimal accretion calculations in the Kuiper Belt that
include fragmentation and velocity evolution. All models produce two power law
cumulative size distributions, N_C propto r^{-q}, with q = 2.5 for radii less
than 0.3-3 km and q = 3 for radii exceeding 1-3 km. The power law indices are
nearly independent of the initial mass in the annulus, the initial eccentricity
of the planetesimal swarm, and the initial size distribution of the
planetesimal swarm. The transition between the two power laws moves to larger
radii as the initial eccentricity increases. The maximum size of objects
depends on their intrinsic tensile strength; Pluto formation requires a
strength exceeding 300 erg per gram. Our models yield formation timescales for
Pluto-sized objects of 30-40 Myr for a minimum mass solar nebula. The
production of several `Plutos' and more than 10^5 50 km radius Kuiper Belt
objects leaves most of the initial mass in 0.1-10 km radius objects that can be
collisionally depleted over the age of the solar system. These results resolve
the puzzle of large Kuiper Belt objects in a small mass Kuiper Belt.
