This paper presents multilevel steganography (MLS), which defines a new concept for hidden communication in telecommunication networks. In MLS, at least two steganographic methods are utilised simultaneously in such a way that one method's (the upper-level) network traffic serves as a carrier for the second method (the lower-level). Such a relationship between two (or more) information-hiding solutions has several potential benefits. The most important is that the lower-level method's steganographic bandwidth can be utilised to make the secret data unreadable even after the detection of the upper-level method, e.g., it can carry a cryptographic key that deciphers the steganogram carried by the upper-level method. It can also be used to provide the steganogram with integrity. Another important benefit is that the lower-level method may be used as a signalling channel to exchange information that affects the way that the upper-level method functions, thus possibly making the steganographic communication harder to detect. A prototype of MLS for IP networks was also developed, and the experimental results are included in this paper.