The DeltaI = 1/2 rule and direct CP violation epsilon/epsilon' in kaon deca
ys are studied within the framework of the effective Hamiltonian approach i
n conjunction with generalized factorization for hadronic matrix elements.
We identify two principal sources responsible for the enhancement of ReA(0)
/ReA(2): the vertex-type as well as penguin-type corrections to the matrix
elements of four-quark operators, wh ich rend er the physical amplitude ren
ormalization-sca le and -scheme independent, and the nonfactorized effect d
ue to soft-gluon exchange, which is needed to suppress the DeltaI = 3/2 K -
-> pi pi amplitude. Contrary to the chiraI approach which is limited to lig
ht meson decays and fails to reproduce the Aa amplitude, the aforementioned
approach for dealing with scheme and scale issues is applicable to heavy m
eson decays. We obtain ReA(0)/ReA(2) = 13 - 15 if m(s)(1 GeV) lies in the r
ange 125-175 MeV. The bag parameters Bi, which are often employed to parame
trize the scale and scheme dependence of hadronic matrix elements, are calc
ulated in two different renormalization schemes. It is found that B-S((2))
and B-6((0)), both of order 1.5 at mu 1 GeV, are nearly gamma (5) scheme in
dependent, whereas B-3,5,7((0)) as well as B-7((2)) show a sizable scheme d
ependence. Moreover, only B-1,3,4((0)) exhibit a significant m(s) dependenc
e, while the other B-parameters are almost m, independent. For direct CP vi
olation, we obtain epsilon'/epsilon = (0.5 - 1.3) x 10(-3) if m(s)(1 GeV) =
150 MeV and epsilon'/epsilon = (0.8 - 2.0) X 10(-3) if m(s) is as small as
indicated by some recent lattice calculations.