This study has advanced state-of-the-art discharge modeling and revealed important aspects of discharge plasma processes. These extensions of existing ion thruster technology and understanding are necessary to fulfill the needs of future space missions. A multi-component hybrid 2-D computational Discharge Chamber Model (DCM) was developed to help identify important ion thruster discharge processes and investigate miniaturization issues. The model is designed to integrate thruster component (cathode and grid) wear models to allow the determination of thruster life and long-term performance. The model accounts for the five major chamber design parameters (chamber geometry, magnetic field, discharge cathode, propellant feed, ion extraction grid characteristics) and self-consistently tracks the effects of the four plasma species (neutral propellant atoms, secondary electrons, primary electrons, and ions). Results from the model show good agreement with experimental data at two operating points for the 30cm NSTAR ion thruster. A thruster design sensitivity performed with DCM suggests that NSTAR thruster performance is greatly enhanced by increasing the strength of the middle magnet ring. The model analyses show that the peak observed in the NSTAR beam profile is due to double ions that are created by overconfinement of primary electrons on the thruster axis. Design sensitivity results show that, at the NSTAR thruster scale, efficient confinement of primary electrons is relatively easy to achieve; therefore, efforts to improve thruster performance should focus on effectively utilizing the primary electrons to minimize double ion production and maximize the number of single ions extracted to the beam. DCM results also show that non-classical effects are important for predicting the perpendicular mobility of secondary electrons in ion thruster discharges. Good agreement with experimental data was found by weighting the influence of Bohm-type diffusion by considering the non-uniform levels of ionization in the discharge. It was found that ion thrusters operate in an intermediately ionized plasma regime that is between fully and weakly ionized approximations. The observations from this study have furthered the understanding of discharge processes and should improve future ion thruster design and modeling efforts. DCM advances state-of-the-art ion thruster modeling and provides a framework for a complete thruster model that can be used for long-life performance assessment and life validation.