Inverse problems are ubiquitous in hydrological modelling for parameter estimation, system understanding, sustainable water resources management, and the operation of digital twins. While statistical inversion is especially popular, its sampling-based nature often inhibits its application to computationally costly models, which has compromised the use of the Generalized Likelihood Uncertainty Estimation (GLUE) methodology, e.g., for spatially distributed (partial) differential equation based models. In this study we introduce multilevel GLUE (MLGLUE), which alleviates the computational burden of statistical inversion by utilizing a hierarchy of model resolutions. Inspired by multilevel Monte Carlo, most parameter samples are evaluated on lower levels with computationally cheap low-resolution models and only samples associated with a likelihood above a certain threshold are subsequently passed to higher levels with costly high-resolution models for evaluation. Inferences are made at the level of the highest-resolution model but substantial computational savings are achieved by discarding samples with low likelihood already on levels with low resolution and low computational cost. Two example inverse problems, using a rainfall-runoff model and groundwater flow model, demonstrate the substantially increased computational efficiency of MLGLUE compared to GLUE as well as the similarity of inversion results. Findings are furthermore compared to inversion results from Markov-chain Monte Carlo (MCMC) and multilevel delayed acceptance MCMC, a corresponding multilevel variant, to compare the effects of the multilevel extension. All examples demonstrate the wide-range suitability of the approach and include guidelines for practical applications.