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) proportional to r(-2.5) for radii less than or similar to 0.3-3 km and N(C) proportional to r(-3) for radii greater than or similar to 1-3 km. The power-law indices are nearly independent of the initial mass in the annulus, M(0); the initial eccentricity of the planetesimal swarm, e(0); and the initial size distribution of the planetesimal swarm. The transition between the two power laws moves to larger radii as e(0) increases. The maximum size of objects depends on the intrinsic tensile strength, S(0); Pluto formation requires S(0) greater than or similar to 300 ergs g(-1). The timescale to produce Pluto-sized objects, tau(P), is roughly proportional to M(0)(-1) and e(0) and is less sensitive to other input parameters. Our models yield tau(P) approximate to 30-40 Myr for planetesimals with e(0) = 10(-3) in a minimum mass solar nebula. The production of several "Plutos" and similar to 10(5) Kuiper Belt objects with 50 km radius 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.