Abstract: Soil water percolation is a key process in the life cycle of water in fields, watersheds, and river basins. The Environmental Policy Integrated Climate (EPIC) and the Agricultural Policy/Environmental eXtender (APEX) are continuous models developed for evaluating the environmental effects of agricultural management. Traditionally, these models have simulated soil water percolation processes using a tipping-bucket approach, with the rate of flow limited by the saturated hydraulic conductivity. This simple approach often leads to inaccuracy in simulating elevated soil water conditions where soil water content (SWC) levels may remain above field capacity under prolonged wet weather periods or limited drainage. To overcome this deficiency, a new sub-model, the variable saturation hydraulic conductivity (VSHC) method, was developed for simulating soil water percolation processes using a nonlinear equation to estimate the effective hydraulic conductivity as a function of the SWC and soil properties. The VSHC method was evaluated at three sites in the United States and two sites in Europe. In addition, a numerical solution of the Richards equation was used as a benchmark for SWC comparison. Results show that the VSHC method substantially improves the accuracy of the SWC simulation in long-term simulations, particularly during wet periods. At the watershed scale, results on the Riesel Y2 watershed indicate that the VSHC method enhances model performance in the high-flow regime of channel peak flows because of the improved estimation of SWC, which implies that the improved SWC simulation at the field scale is beneficial to hydrologic modeling at the watershed scale.