The observation that features of the social environment, including family, school, and neighborhood characteristics, are associated with individual-level outcomes has spurred the development of dozens of multilevel or ecological theoretical frameworks in epidemiology, public health, psychology, and sociology, among other disciplines. Despite the widespread use of such theories in etiological, intervention, and policy studies, challenges remain in bridging multilevel theory and empirical research. This paper set out to synthesize these challenges and provide specific examples of methodological and analytical strategies researchers are using to gain a more nuanced understanding of the social determinants of psychiatric disorders, with a focus on children’s mental health. To accomplish this goal, we begin by describing multilevel theories, defining their core elements, and discussing what these theories suggest is needed in empirical work. In the second part, we outline the main challenges researchers face in translating multilevel theory into research. These challenges are presented for each stage of the research process. In the third section, we describe two methods being used as alternatives to traditional multilevel modeling techniques to better bridge multilevel theory and multilevel research. These are: (1) multilevel factor analysis and multilevel structural equation modeling; and (2) dynamic systems approaches. Through its review of multilevel theory, assessment of existing strategies, and examination of emerging methodologies, this paper offers a framework to evaluate and guide empirical studies on the social determinants of child psychiatric disorders as well as health across the lifecourse.