Area Level

In nightmare and hell mode, the Area Level is basically used to determine the types of items (and their mods) that can be dropped from monsters, as well as changing to-hit calculations on a monster. It also also plays a role in determining the possible item types from chests and chest-like objects, in all difficulty levels.

For a useful Diablo 2 Expansion (1.10+) example, grand charms that appear with a +skillbranch mod can only appear on monsters that have been killed from The Great Marsh in act 3 in nightmare difficulty onwards. Technically, the +skillbranch mod can only appear on items of ilvl 50+, and the ilvl of an item is equal to the mlvl of the monster that dropped it. In normal, mlvl is equal to the monster's level, while in nightmare/hell, mlvl is equal to the area level the monster is found in.

Via [1]:

Ilevel 50+ = plain skillers (plain mosters NM Great Marsh onwards)

ilevel 61+ = skillers with 31-35 life (plain monsters most of Act 5 NM onwards)

ilevel 77+ = skiller with 36-40 life (plain monsters Hell Lost City onwards; Pindle)

ilevel 91+ = skiller with 41-45 life (Hell Baal ilevel 99, Hell Nithy ilevel 95 and Hell Diablo ilevel 94)

Exceptions:

Champion and Unique monsters have monster levels and drop items with item levels of +2 and +3 of their area's level, respectively.

Super Unique monsters have their own special monster levels and drop items with item levels independent of their area's level.

Act	Normal alvl	Nightmare alvl	Hell alvl	Level Name
Act 1	1	36	67	Blood Moor
Act 1	2	36	68	Cold Plains
Act 1	4	37	68	Stony Field
Act 1	5	38	68	Dark Wood
Act 1	6	38	69	Black Marsh
Act 1	8	39	69	Tamoe Highland
Act 1	1	36	79	Den of Evil
Act 1	2	36	77	The Cave Level 1
Act 1	4	37	69	Underground Passage Level 1
Act 1	5	38	80	The Hole Level 1
Act 1	7	39	85	The Pit Level 1
Act 1	2	37	78	The Cave Level 2
Act 1	4	38	83	Underground Passage Level 2
Act 1	5	39	81	The Hole Level 2
Act 1	7	40	85	The Pit Level 2
Act 1	3	36	80	Burial Grounds
Act 1	3	37	83	Crypt
Act 1	3	37	85	Mausoleum
Act 1	7	38	75	Tower Cellar Level 1
Act 1	7	39	76	Tower Cellar Level 2
Act 1	7	40	77	Tower Cellar Level 3
Act 1	7	41	78	Tower Cellar Level 4
Act 1	7	42	79	Tower Cellar Level 5
Act 1	8	40	70	Monastery Gate
Act 1	9	40	70	Outer Cloister
Act 1	9	40	70	Barracks
Act 1	10	41	71	Jail Level 1
Act 1	10	41	71	Jail Level 2
Act 1	10	41	71	Jail Level 3
Act 1	10	41	72	Inner Cloister
Act 1	11	42	72	Cathedral
Act 1	11	42	72	Catacombs Level 1
Act 1	11	42	73	Catacombs Level 2
Act 1	12	43	73	Catacombs Level 3
Act 1	12	43	73	Catacombs Level 4
Act 1	6	39	76	Tristram
Act 1	28	64	81	Secret Cow Level
Act 2	14	43	75	Rocky Waste
Act 2	15	44	76	Dry Hills
Act 2	16	45	76	Far Oasis
Act 2	17	46	77	Lost City
Act 2	18	46	77	Valley of Snakes
Act 2	16	48	79	Canyon of the Magi
Act 2	13	43	74	Sewers Level 1
Act 2	13	43	74	Sewers Level 2
Act 2	14	44	75	Sewers Level 3
Act 2	13	47	78	Harem Level 2
Act 2	13	47	78	Palace Cellar Level 1
Act 2	13	47	78	Palace Cellar Level 2
Act 2	13	48	78	Palace Cellar Level 3
Act 2	12	44	78	Stony Tomb Level 1
Act 2	12	44	79	Halls of the Dead Level 1
Act 2	13	45	81	Halls of the Dead Level 2
Act 2	14	47	82	Claw Viper Temple Level 1
Act 2	12	44	79	Stony Tomb Level 2
Act 2	13	45	82	Halls of the Dead Level 3
Act 2	14	47	83	Claw Viper Temple Level 2
Act 2	17	45	84	Maggot Lair Level 1
Act 2	17	45	84	Maggot Lair Level 2
Act 2	17	46	85	Maggot Lair Level 3
Act 2	17	46	85	Ancient Tunnels
Act 2	17	49	80	Tal Rasha's Tomb
Act 2	17	49	80	Tal Rasha's Chamber
Act 2	14	48	79	Arcane Sanctuary
Act 3	21	49	79	Spider Forest
Act 3	21	50	80	Great Marsh
Act 3	22	50	80	Flayer Jungle
Act 3	22	52	80	Lower Kurast
Act 3	22	52	81	Kurast Bazaar
Act 3	23	52	81	Upper Kurast
Act 3	24	53	81	Kurast Causeway
Act 3	24	54	82	Travincal
Act 3	21	50	79	Spider Cave (Arachnid Lair)
Act 3	21	50	79	Spider Cavern
Act 3	21	51	80	Swampy Pit Level 1
Act 3	21	51	81	Swampy Pit Level 2
Act 3	22	51	81	Flayer Dungeon Level 1
Act 3	22	51	82	Flayer Dungeon Level 2
Act 3	21	51	82	Swampy Pit Level 3
Act 3	22	51	83	Flayer Dungeon Level 3
Act 3	23	52	84	Sewers Level 1
Act 3	24	53	85	Sewers Level 2
Act 3	23	53	84	Ruined Temple (In Kurast Bazaar)
Act 3	23	53	84	Disused Fane (In Kurast Bazaar)
Act 3	23	53	84	Forgotten Reliquary (In Upper Kurast)
Act 3	24	54	85	Forgotten Temple (In Upper Kurast)
Act 3	24	54	85	Ruined Fane (In Kurast Causeway)
Act 3	24	54	85	Disused Reliquary (In Kurast Causeway)
Act 3	25	55	83	Durance of Hate Level 1
Act 3	25	55	83	Durance of Hate Level 2
Act 3	25	55	83	Durance of Hate Level 3
Act 4	26	56	82	Outer Steppes
Act 4	26	56	83	Plains of Despair
Act 4	27	57	84	City of the Damned
Act 4	27	57	85	River of Flame
Act 4	28	58	85	Chaos Sanctuary
Act 5	24	58	80	Bloody Foothills
Act 5	25	59	81	Frigid Highlands
Act 5	26	60	81	Arreat Plateau
Act 5	29	61	82	Crystalized Cavern Level 1 (Crystalline Passage)
Act 5	29	61	83	Cellar of Pity (Frozen River)
Act 5	29	61	83	Crystalized Cavern Level 2 (Glacial Trail)
Act 5	29	61	84	Echo Chamber (Drifter Cavern)
Act 5	27	60	81	Tundra Wastelands (Frozen Tundra)
Act 5	29	62	82	Glacial Caves Level 1 (Ancients' Way)
Act 5	29	62	83	Glacial Caves Level 2 (Icy Cellar)
Act 5	37	68	87	Rocky Summit (Arreat Summit)
Act 5	32	63	83	Nihlathak's Temple
Act 5	33	63	83	Halls of Anguish
Act 5	34	64	84	Halls of Death's Calling (Halls of Pain)
Act 5	36	64	84	Halls of Vaught
Act 5	39	60	81	Hell 1 (Abaddon)
Act 5	39	61	82	Hell 2 (Pit of Acheron)
Act 5	39	62	83	Hell 3 (Infernal Pit)
Act 5	39	65	85	The Worldstone Keep Level 1
Act 5	40	65	85	The Worldstone Keep Level 2
Act 5	42	66	85	The Worldstone Keep Level 3
Act 5	43	66	85	Throne of Destruction
Act 5	43	66	85	Worldstone Chamber

Via [2]