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This paper proposes a novel cooperative diversity protocol using multilevel coded (MLC) modulation, which aims at wireless networks composed of more than two cooperative nodes. If the time-division (TD) based cooperative diversity is applied to the case of multiple sources, its transmission efficiency decreases in proportion to the number of sources which results in the degradation of performance. Although several cooperative diversity protocols based on symbol superposition have been proposed to overcome this inherent degradation, most of them are designed for a two-node cooperation and their complexity increases exponentially with the number of cooperating nodes. To the contrary, the proposed MLC cooperation takes advantage of the simplicity of MLC structure and allows a flexible design, without exponential increase of overall complexity. We introduce two rate allocation design criteria, i.e., minimum outage probability and maximum transmission rate, and demonstrate the advantages of the MLC cooperation in terms of outage probability and frame error rate (FER) performance.