We consider the effect of variational determination of the location of the generalized transition state on the prediction of kinetic isotope effects for atom transfer reactions. Instead of choosing the transition state dividing surface on the basis of the conventional maximum energy criterion we use a maximum free energy criterion in which entropic effects compete with energetic effects. We consider several reactions with symmetric and nearly symmetric saddle points, loose saddle points, and intermediate cases. Numerical examples are based on model potential energy surfaces for three-body systems. The model potential energy surfaces are based on a modified and extended bond-energy, bond-order method that we have presented previously. We present examples involving isotopic substitution by 2H, 3H, 14C, and 37Cl for a wide range of temperatures. In some cases the results of the variational calculations essentially confirm the more readily used conventional transition state theory. However, this is not always the case. We show that the location of the variationally best transition state dividing surface is sometimes very sensitive to isotopic substitution. Furthermore, this sometimes leads to a large change in the predicted kinetic isotope effect.