One of the striking results of protein thermodynamics is that the heat capacity change upon denaturation is large and positive. This change is generally ascribed to the exposure of non-polar groups to water on denaturation, in analogy to the large heat capacity change for the transfer of small non-polar molecules from hydrocarbons to water. Calculations of the heat capacity based on the exposed surface area of the completely unfolded denatured state give good agreement with experimental data. This result is difficult to reconcile with evidence that the heat denatured state in the absence of denaturants is reasonably compact. In this work, sample conformations for the denatured state of truncated CI2 are obtained by use of an effective energy function for proteins in solution. The energy function gives denatured conformations that are compact with radii of gyration that are slightly larger than that of the native state. The model is used to estimate the heat capacity, as well as that of the native state, at 300 and 350 K via finite enthalpy differences. The calculations show that the heat capacity of denaturation can have large positive contributions from non-covalent intraprotein interactions because these interactions change more with temperature in non-native conformations than in the native state. Including this contribution, which has been neglected in empirical surface area models, leads to heat capacities of unfolding for compact denatured states that are consistent with the experimental heat capacity data. Estimates of the stability curve of CI2 made with the effective energy function support the present model.