Summary. - This article describes a well developed, but not yet widespread, statistical method. It presents its distinguishing characteristic (and pre-empts the misunderstanding that all it is about, is including predictors from more than one level). It walks the reader through a simplified example: how can multilevel analysis be used to explain variances in patient satisfaction with the way hospital work is organized. It also discusses the importance of the disciplinary setting for the extra benefit provided by multilevel analysis, as compared to traditional contextual analysis. Key words: multilevel analysis, hospital and health services research.