To investigate the nature of earthquake‐magnitude distributions on faults, we compare the interevent variability of surface displacement at a point on a fault from a composite global data set of paleoseismic observations with the variability expected from two prevailing magnitude–frequency distributions: the truncated‐exponential model and the characteristic‐earthquake model. We use forward modeling to predict the coefficient of variation (CV) for the alternative earthquake distributions, incorporating factors that would effect observations of displacement at a site. The characteristic‐earthquake model (with a characteristic‐magnitude range of ±0.25) produces CV values consistent with the data (CV∼0.5) only if the variability for a given earthquake magnitude is small. This condition implies that rupture patterns on a fault are stable, in keeping with the concept behind the model. This constraint also bears upon fault‐rupture hazard analysis, which, for lack of point‐specific information, has used global scaling relations to infer variability in average displacement for a given‐size earthquake. Exponential distributions of earthquakes (from M 5 to the maximum magnitude) give rise to CV values that are significantly larger than the empirical constraint. A version of the model truncated at M 7, however, yields values consistent with a larger CV (∼0.6) determined for small‐displacement sites. Although this result allows for a difference in the magnitude distribution of smaller surface‐rupturing earthquakes, it may reflect, in part, less stability in the displacement profile of smaller ruptures and/or the tails of larger ruptures.