This paper illustrates the surplus value of multilevel exploratory factor analysis in educational effectiveness research. Educational researchers often use measures for process variables at the class or school level to explain differences in student outcomes. Recently, van de Vijver and Poortinga (2002) have developed a procedure for multilevel exploratory factor analysis which can be extremely useful in this kind of application. Their procedure, which is based on the "multilevel confirmatory factor analysis" framework of Muthen (1994), is demonstrated by means of constructing measures for school process variables based on teacher data. Every step of the procedure is nicely illustrated and commented on using these data. Furthermore, the meaning of the findings and challenges when using multilevel exploratory factor analysis are emphasized. (Contains 3 notes, 3 tables, and 1 figure.)