why processlist list shows limited threads

Actually I have set **max_connection** value set to **500** but processes shows only **266** i.e when I run **show full processlist** it shows only 266 processes not more than this however my connection value is 500. I analyzed every query and found that every query is using single table there is no query which is using 2 tables. Is any other settings which I am missing? Please suggest on this.Why it is showing only 266 processes?