Methods of accurate modeling and power capability predicting for ultracapacitors are of great significance in management and application of lithium-ion battery/ultracapacitor hybrid energy storage system. To overcome the simulation error coming from constant capacitance model, an improved ultracapacitor model based on variable capacitance is proposed, where the main capacitance varies with voltage according to a piecewise linear function. A novel state-of-charge calculation approach is developed accordingly. After that, a multi-constraint power capability prediction is developed for ultracapacitor, in which a Kalman-filter-based state observer is designed for tracking ultracapacitor's real-time behavior. Finally, experimental results verify the proposed methods. The accuracy of the proposed model is verified by terminal voltage simulating results under different temperatures, and the effectiveness of the designed observer is proved by various test conditions. Additionally, the power capability prediction results of different time scales and temperatures are compared, to study their effects on ultracapacitor's power capability.