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Multilevel exploratory factor analysis (MEFA) is a technique to extract latent factors underlying observed items in multilevel data. This study investigated parallel analysis (PA) criterion, in identifying the correct number of factors in MEFA. The PA approach performed well in extracting the Level-1 model factor number, and the correct rate of identifying the two-factor model was more than 60%. However, when the PA approach was used to identify the Level-2 model factor number, results were not as good as at Level-1.