The performance of multilevel trellis codes (MLTCs) using MPSK signalling with multistage decoding (MSD) is studied. It is shown that 8PSK codes can only achieve a real coding gain of 4dB over uncoded QPSK at a bit error rate (BER) of 10-5. However, multistage decoding has a significant complexity advantage compared to Viterbi decoding which is used with one level trellis coded modulation (TCM). It is shown that some 8PSK MLTCs with high spectral efficiency (about 2.5 bits/symbol) and moderate coding gain have a performance versus complexity advantage over one level TCM even at a BER of 10-5. Computer simulations support this result. Simulation is also used to study the performance loss due to the suboptimal nature of MSD. Concatenated multilevel codes are designed by using concatenated codes at one or more levels of the MLTC.