The ADSL standard is based on using hard decision decoding of Reed-Solomon (RS) codes. The standard states that as an option a four-dimensional 16-state trellis code can be concatenated with an RS code. The resulting structure is rather complex mainly because of the associated complexity of the Viterbi decoder of the trellis code. An alternative to this complex structure is to improve the performance when only RS codes are used. The performance of using only RS code is investigated for ADSL systems based on the discrete multitone (DMT) technique. To further improve the coding performance, we propose to use a bandwidth-efficient multilevel RS coding structure in ADSL DMT systems. The performance of the coded system under different stationary noise (AWGN and crosstalk) conditions is evaluated. The multilevel RS coding is shown to provide 1 to 2 dB additional coding gain improvements over conventional RS coding. It is also shown through simulation that using multi-dimensional QAM constellations can further improve the performance.