Archaeological accounts of cultural change reveal a fundamental conflict: Some suggest that change is gradual, accelerating over time, whereas others indicate that it is punctuated, with long periods of stasis interspersed by sudden gains or losses of multiple traits. Existing models of cultural evolution, inspired by models of genetic evolution, lend support to the former and do not generate trajectories that include large-scale punctuated change. We propose a simple model that can give rise to both exponential and punctuated patterns of gain and loss of cultural traits. In it, cultural innovation comprises several realistic interdependent processes that occur at different rates. The model also takes into account two properties intrinsic to cultural evolution: the differential distribution of traits among social groups and the impact of environmental change. In our model, a population may be subdivided into groups with different cultural repertoires leading to increased susceptibility to cultural loss, whereas environmental change may lead to rapid loss of traits that are not useful in a new environment. Taken together, our results suggest the usefulness of a concept of an effective cultural population size.