Multilevel Rasch models are increasingly used to estimate the relationships between test scores and student and school factors. Response data were generated to follow one-, two-, and three-parameter logistic (1PL, 2PL, 3PL) models, but the Rasch model was used to estimate the latent regression parameters. When the response functions followed 2PL or 3PL models, the proportion of variance explained in test scores by the simulated student or school predictors was estimated accurately with a Rasch model. Proportion of variance within and between schools was also estimated accurately. The regression coefficients were misestimated unless they were rescaled out of logit units. However, item-level parameters, such as DIF effects, were biased when the Rasch model was violated, similar to single-level models.