A multi-level soft frequency reuse (ML-SFR) scheme and a resource allocation methodology are proposed for wireless communication systems in this letter. In the proposed ML-SFR scheme, there are 2N power density limit levels, achieving better interference pattern and further improving the cell edge and overall data rate, compared to the traditional 2-level SFR scheme. The detailed design of an 8-level SFR scheme is demonstrated. Numeral results show that the cell edge spectrum efficiency is increased to 5 times of that of reuse 1 and the overall spectrum efficiency is improved by 31%. ML-SFR can be utilized in the current 4G system and would be a candidate key technology for future 5G systems.