The main purpose of this study is to improve estimation efficiency in obtaining maximum marginal likelihood estimates of contextual effects in the framework of nonlinear multilevel latent variable model by adopting the Metropolis-Hastings Robbins-Monro algorithm (MH-RM; Cai, 2008, 2010a, 2010b). Results indicate that the MH-RM algorithm can produce estimates and standard errors efficiently. Simulations, with various sampling and measurement structure conditions, were conducted to obtain information about the performance of nonlinear multilevel latent variable modeling compared to traditional hierarchical linear modeling. Results suggest that nonlinear multilevel latent variable modeling can more properly estimate and detect contextual effects than the traditional approach. As an empirical illustration, data from the Programme for International Student Assessment (PISA; OECD, 2000) were analyzed. [This paper was published in "Journal of Educational and Behavioral Statistics" v39 n6 p550-582 2014 (EJ1048233).]