[bhaak]

Dungeon level depth, mostly.

This being NetHack, an answer is often not as straight forward as it could be. Most of the time the level difficulty is proportional to how deep you are into the dungeon but there are levels where your experience level factors in as well.

[vintermann]

If so, it's changed. Back when I played, spawning of random monsters (i.e. almost all of them) was based on simply dungeon level + experience level.