Technical Abstract: Ephemeral gully erosion can cause severe soil degradation and contribute significantly to total soil losses in agricultural areas. Physically-based prediction technology is necessary to assess the magnitude of these phenomena so that appropriate conservation measures can be implemented, but such technology currently does not exist. To address this issue, a conceptual and numerical framework is presented where ephemeral gully development, growth, and associated soil losses are simulated within the Annualized Agricultural Non-Point Source (AnnAGNPS) model. This approach incorporates analytic formulations for plunge pool erosion and headcut retreat within single or multiple storm events in unsteady, spatially-varied flow at the sub-cell scale, and addresses five soil particle-size classes to predict gully evolution, transport-capacity and transport-limited flows, gully widening, and gully reactivation. Single event and continuous simulations demonstrate the model’s utility for predicting both the initial development of an ephemeral gully and its evolution over multiple runoff events. The model is shown to recreate reasonably well the dimensions of observed ephemeral gullies in Mississippi. The inclusion of ephemeral gully erosion within AnnAGNPS will greatly enhance the model’s predictive capabilities and further assist practitioners in the management of agricultural watersheds.