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We present a new multilevel fast Fourier transform (MLFFT) method and its application for the 3-D structures capacitance extraction. The multilevel octree structure, multilevel interpolation/projection, and subdomain FFTs techniques are employed in the MLFFT. Distinctions between the MLFFT and the conventional FFT-based methods are discussed carefully. Numerical results demonstrate that the MLFFT is more efficient than conventional FFT based methods, especially when analyzing inhomogeneous problems.