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The purpose of this study was to examine the performance of differential item functioning (DIF) assessment in the presence of a multilevel structure that often underlies data from large‐scale testing programs. Analyses were conducted using logistic regression (LR), a popular, flexible, and effective tool for DIF detection. Data were simulated using a hierarchical framework, such as might be seen when examinees are clustered in schools, for example. Both standard and hierarchical LR (accounting for multilevel data) approaches to DIF detection were employed. Results highlight the differences in DIF detection rates when the analytic strategy matches the data structure. Specifically, when the grouping variable was within clusters, LR and HLR performed similarly in terms of Type I error control and power. However, when the grouping variable was between clusters, LR failed to maintain the nominal Type I error rate of .05. HLR was able to maintain this rate. However, power for HLR tended to be low under many conditions in the between cluster variable case.
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