diff --git a/mesa/examples/advanced/alliance_formation/app.py b/mesa/examples/advanced/alliance_formation/app.py
index 147efb672ad..3dd25c47a9b 100644
--- a/mesa/examples/advanced/alliance_formation/app.py
+++ b/mesa/examples/advanced/alliance_formation/app.py
@@ -24,6 +24,14 @@
         "max": 100,
         "step": 1,
     },
+    "std_dev": {
+        "type": "SliderFloat",
+        "value": 0.1,
+        "label": "Attribute variation:",
+        "min": 0.01,
+        "max": 0.4,
+        "step": 0.01,
+    },
 }
 
 # Create visualization elements. The visualization elements are solara components
@@ -37,12 +45,12 @@
 def plot_network(model):
     update_counter.get()
     g = model.network
-    pos = nx.fruchterman_reingold_layout(g)
+    pos = nx.multipartite_layout(g, subset_key="level", align="horizontal")
     fig = Figure()
     ax = fig.subplots()
     labels = {agent.unique_id: agent.unique_id for agent in model.agents}
     node_sizes = [g.nodes[node]["size"] for node in g.nodes]
-    node_colors = [g.nodes[node]["size"] for node in g.nodes()]
+    node_colors = [g.nodes[node]["level"] for node in g.nodes()]
 
     nx.draw(
         g,
@@ -53,6 +61,7 @@ def plot_network(model):
         labels=labels,
         ax=ax,
     )
+    ax.set_axis_off()
 
     solara.FigureMatplotlib(fig)
 
diff --git a/mesa/examples/advanced/alliance_formation/model.py b/mesa/examples/advanced/alliance_formation/model.py
index b9defe2d576..8d0caa655cd 100644
--- a/mesa/examples/advanced/alliance_formation/model.py
+++ b/mesa/examples/advanced/alliance_formation/model.py
@@ -162,12 +162,14 @@ def step(self):
         """
         Execute one step of the model.
         """
-        # Get all other agents of the same type
-        agent_types = list(self.agents_by_type.keys())
-
-        for agent_type in agent_types:
-            similar_agents = self.agents_by_type[agent_type]
-
+        # Agents at the same hierarchy level can form an alliance. Meta-agents
+        # use dynamically generated classes, so grouping by concrete type would
+        # isolate every meta-agent and prevent higher-level alliances.
+        agents_by_level = {}
+        for agent in self.agents:
+            agents_by_level.setdefault(agent.level, []).append(agent)
+
+        for similar_agents in agents_by_level.values():
             # Find the best combinations using find_combinations
             if (
                 len(similar_agents) > 1
diff --git a/tests/examples/test_alliance_formation_model.py b/tests/examples/test_alliance_formation_model.py
index 3b49269db4c..06860eb881b 100644
--- a/tests/examples/test_alliance_formation_model.py
+++ b/tests/examples/test_alliance_formation_model.py
@@ -43,3 +43,16 @@ def fake_find_combinations(*args, **kwargs):
 
     assert backend.as_triplets() == expected_triplets
     backend.assert_invariants()
+
+
+def test_alliance_model_forms_higher_level_alliances():
+    """Meta-agents at one level can form an alliance at the next level."""
+    model = MultiLevelAllianceModel(
+        scenario=AllianceScenario(n=4, mean=0.5, std_dev=0.0, rng=42)
+    )
+
+    model.step()
+    assert sum(agent.level == 1 for agent in model.agents) == 2
+
+    model.step()
+    assert sum(agent.level == 2 for agent in model.agents) == 1