A multilevel logistic regression approach provides an attractive and practical alternative for the study of Differential Item Functioning (DIF). It is not only useful for identifying items with DIF but also for explaining the presence of DIF. Kamata and Binici (2003) first attempted to identify group unit characteristic variables explaining the variation of DIF by using hierarchical generalized linear models. Their models were implemented by the HLM-5 software, which uses the penalized or predictive quasi-likelihood (PQL) method. They found that the variance estimates produced by HLM-5 for the level 3 parameters are substantially negatively biased. This study extends their work by using a Bayesian approach to obtain more accurate parameter estimates. Two different approaches to modeling the DIF will be presented. These are referred to as the relative and mixture distribution approach, respectively. The relative approach measures the DIF of a particular item relative to the mean overall DIF for all items in the test. The mixture distribution approach treats the DIF as independent values drawn from a distribution which is a mixture of a normal distribution and a discrete distribution concentrated at zero. A simulation study is presented to assess the adequacy of the proposed models. This work also describes and studies models which allow the DIF to vary at level 3 (from school to school). In an example using real data, it is shown how the models can be applied to the identification of items with DIF and the explanation of the source of the DIF.