Earthquake source spectra contain fundamental information about the dynamics of earthquake rupture. However, the inherent tradeoffs in separating source and path effects, when combined with limitations in recorded signal bandwidth, make it challenging to obtain reliable source spectral estimates for large earthquake data sets. We present here a stable and statistically robust spectral decomposition method that iteratively partitions the observed waveform spectra into source, receiver, and path terms. Unlike previous methods of its kind, our new approach provides formal uncertainty estimates and does not assume self‐similar scaling in earthquake source properties. Its computational efficiency allows us to examine large data sets (tens of thousands of earthquakes) that would be impractical to analyze using standard empirical Green's function‐based approaches. We apply the spectral decomposition technique to P wave spectra from five areas of active contemporary seismicity in Southern California: the Yuha Desert, the San Jacinto Fault, and the Big Bear, Landers, and Hector Mine regions of the Mojave Desert. We show that the source spectra are generally consistent with an increase in median Brune‐type stress drop with seismic moment but that this observed deviation from self‐similar scaling is both model dependent and varies in strength from region to region. We also present evidence for significant variations in median stress drop and stress drop variability on regional and local length scales. These results both contribute to our current understanding of earthquake source physics and have practical implications for the next generation of ground motion prediction assessments.