In this paper, we show how adaptive prototype optimization can be used to improve the performance of function approximation based on Kanerva Coding when solving largescale instances of classic multi-agent problems. We apply our techniques to the predator-prey pursuit problem. We first demonstrate that Kanerva Coding applied within a reinforcement learner does not give good results. We then describe our new adaptive Kanerva-based function approximation algorithm, based on prototype deletion and generation. We show that probabilistic prototype deletion with random prototype generation increases the fraction of test instances that are solved from 45% to 90%, and that prototype splitting increases that fraction to 94%. We also show that optimizing prototypes reduces the number of prototypes, and therefore the number of features, needed to achieve a 90% solution rate by up to 87%. These results demonstrate that our approach can dramatically improve the quality of the results obtained and r...