The aim of the paper is to examine the relationship between departmental attributes and university faculty research activity. Since individual and departmental factors are highly interrelated, individual attributes are included in a hierarchical linear model taking into consideration the nested structure of the data. Research activity is measured by research input in terms of time spent on research activities, and research output in terms of publications. The contextual factors have greatest impact on the indicator that is considered to be most essential when assessing research performance: published scientific articles. Department climate, age structure, as well as proportion of faculty members' with PhD's have significant impact on research output.