How is the default max Java heap size determined?

On Windows, you can use the following command to find out the defaults on the system where your applications runs.

java -XX:+PrintFlagsFinal -version | findstr HeapSize

Look for the options MaxHeapSize (for -Xmx) and InitialHeapSize for -Xms.

On a Unix/Linux system, you can do

java -XX:+PrintFlagsFinal -version | grep HeapSize

I believe the resulting output is in bytes.

For Java SE 5: According to Garbage Collector Ergonomics [Oracle]:

initial heap size:

Larger of 1/64th of the machine's physical memory on the machine or some reasonable minimum. Before J2SE 5.0, the default initial heap size was a reasonable minimum, which varies by platform. You can override this default using the -Xms command-line option.

maximum heap size:

Smaller of 1/4th of the physical memory or 1GB. Before J2SE 5.0, the default maximum heap size was 64MB. You can override this default using the -Xmx command-line option.

UPDATE:

As pointed out by Tom Anderson in his comment, the above is for server-class machines. From Ergonomics in the 5.0 JavaTM Virtual Machine:

In the J2SE platform version 5.0 a class of machine referred to as a server-class machine has been defined as a machine with

• 2 or more physical processors
• 2 or more Gbytes of physical memory

with the exception of 32 bit platforms running a version of the Windows operating system. On all other platforms the default values are the same as the default values for version 1.4.2.

In the J2SE platform version 1.4.2 by default the following selections were made

• initial heap size of 4 Mbyte
• maximum heap size of 64 Mbyte

Java 8 takes more than 1/64th of your physical memory for your Xmssize (Minimum HeapSize) and less than 1/4th of your physical memory for your -Xmxsize (Maximum HeapSize).

You can check the default Java heap size by:

In Windows:

java -XX:+PrintFlagsFinal -version | findstr /i "HeapSize PermSize ThreadStackSize"

In Linux:

java -XX:+PrintFlagsFinal -version | grep -iE 'HeapSize|PermSize|ThreadStackSize'

What system configuration settings influence the default value?

The machine's physical memory & Java version.