This paper presents an analysis of allophony, exceptionality, and variation in Modern Hebrew spirantization within a single grammar. The proposed account handles both regularly spirantizing and exceptional segments by extending the set-based approach of Pater (2000) to the segmental level. In this approach, exceptional segments (which do not vary) are members of a set which is indexed to a faithfulness constraint that dominates the markedness constraints driving spirantization. Variation in regularly alternating segments--which was found in an acceptability rating task--is accounted for through stochastic ranking of the relevant markedness constraints.