diff --git a/lib/loglevel.js b/lib/loglevel.js
index 4e8f639..604cc21 100644
--- a/lib/loglevel.js
+++ b/lib/loglevel.js
@@ -118,10 +118,30 @@
                enableLoggingWhenConsoleArrives.apply(this, arguments);
     }
 
-    function Logger(name, defaultLevel, factory) {
+    function Logger(name, factory) {
+      // Private instance variables.
       var self = this;
-      var currentLevel;
-      defaultLevel = defaultLevel == null ? "WARN" : defaultLevel;
+      /**
+       * The level inherited from a parent logger (or a global default). We
+       * cache this here rather than delegating to the parent so that it stays
+       * in sync with the actual logging methods that we have installed (the
+       * parent could change levels but we might not have rebuilt the loggers
+       * in this child yet).
+       * @type {number}
+       */
+      var inheritedLevel;
+      /**
+       * The default level for this logger, if any. If set, this overrides
+       * `inheritedLevel`.
+       * @type {number|null}
+       */
+      var defaultLevel;
+      /**
+       * A user-specific level for this logger. If set, this overrides
+       * `defaultLevel`.
+       * @type {number|null}
+       */
+      var userLevel;
 
       var storageKey = "loglevel";
       if (typeof name === "string") {
@@ -185,7 +205,6 @@
           // Use localStorage if available
           try {
               window.localStorage.removeItem(storageKey);
-              return;
           } catch (ignore) {}
 
           // Use session cookie as fallback
@@ -230,31 +249,36 @@
       self.methodFactory = factory || defaultMethodFactory;
 
       self.getLevel = function () {
-          return currentLevel == null ? defaultLevel : currentLevel;
+          if (userLevel != null) {
+            return userLevel;
+          } else if (defaultLevel != null) {
+            return defaultLevel;
+          } else {
+            return inheritedLevel;
+          }
       };
 
       self.setLevel = function (level, persist) {
-          level = normalizeLevel(level);
-          currentLevel = level;
+          userLevel = normalizeLevel(level);
           if (persist !== false) {  // defaults to true
-              persistLevelIfPossible(level);
+              persistLevelIfPossible(userLevel);
           }
-          // NOTE: in v2, this should call rebuild(), which is recursive.
+
+          // NOTE: in v2, this should call rebuild(), which updates children.
           return rebuildLoggingMethods();
       };
 
       self.setDefaultLevel = function (level) {
           defaultLevel = normalizeLevel(level);
-          if (currentLevel == null) {
-              // NOTE: in v2, this should call rebuild(), which is recursive.
-              rebuildLoggingMethods();
+          if (!getPersistedLevel()) {
+              self.setLevel(level, false);
           }
       };
 
       self.resetLevel = function () {
+          userLevel = null;
           clearPersistedLevel();
-          currentLevel = null;
-          self.setDefaultLevel(defaultLevel);
+          rebuildLoggingMethods();
       };
 
       self.enableAll = function(persist) {
@@ -266,24 +290,30 @@
       };
 
       self.rebuild = function () {
+          if (defaultLogger !== self) {
+              inheritedLevel = normalizeLevel(defaultLogger.getLevel());
+          }
           rebuildLoggingMethods();
 
           if (defaultLogger === self) {
-              var level = self.getLevel();
-
               for (var childName in _loggersByName) {
-                _loggersByName[childName].setDefaultLevel(level);
+                _loggersByName[childName].rebuild();
               }
           }
       };
 
-      // Initialize with the right level
+      // Initialize all the internal levels.
+      inheritedLevel = normalizeLevel(
+          defaultLogger ? defaultLogger.getLevel() : "WARN"
+      );
+      if (defaultLevel != null) {
+          defaultLevel = normalizeLevel(defaultLevel);
+      }
       var initialLevel = getPersistedLevel();
-      if (initialLevel == null) {
-          self.setDefaultLevel(defaultLevel);
-      } else {
-          self.setLevel(initialLevel, false);
+      if (initialLevel != null) {
+          userLevel = normalizeLevel(initialLevel);
       }
+      rebuildLoggingMethods();
     }
 
     /*
@@ -296,13 +326,15 @@
 
     defaultLogger.getLogger = function getLogger(name) {
         if ((typeof name !== "symbol" && typeof name !== "string") || name === "") {
-          throw new TypeError("You must supply a name when creating a logger.");
+            throw new TypeError("You must supply a name when creating a logger.");
         }
 
         var logger = _loggersByName[name];
         if (!logger) {
-          logger = _loggersByName[name] = new Logger(
-            name, defaultLogger.getLevel(), defaultLogger.methodFactory);
+            logger = _loggersByName[name] = new Logger(
+                name,
+                defaultLogger.methodFactory
+            );
         }
         return logger;
     };