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With progressive image or scalable video encoders, as more bits are received, the source can be reconstructed with progressively better quality. These progressive codes have gradual differences of importance in their bitstreams, which necessitates multiple levels of unequal error protection (UEP). One practical method of achieving UEP is based on a constellation of nonuniformly spaced signal points, or hierarchical constellations. However, hierarchical modulation can achieve only a limited number of UEP levels for a given constellation size. Though hierarchical modulation has been intensively studied for digital broadcasting or multimedia transmission, most work has considered only two layered source coding, and methods of achieving a large number of UEP levels for progressive transmission have rarely been studied. In this paper, we propose a multilevel UEP system using multiplexed hierarchical quadrature amplitude modulation (QAM). We show that multiple levels of UEP are achieved by the proposed multiplexing method. When the BER is dominated by the minimum Euclidian distance, we derive an optimal multiplexing approach which minimizes both the average and peak powers. We next propose an asymmetric hierarchical QAM which reduces the peak-to-average power ratio (PAPR) of the proposed UEP system without any performance loss. Numerical results show that the performance of progressive transmission over Rayleigh fading channels is significantly enhanced by the proposed methods.