In nanostructured metallic multilayers, hardness and strength are greatly enhanced compared to their microstructured counterparts. As layer thickness is decreased, three different regions are frequently observed: the first region shows Hall-Petch behavior; the second region shows an even greater dependence on layer thickness; and the third region exhibits a plateau or softening of hardness and strength. The second and third regions are studied using our discrete dislocation simulation method. This method includes the effects of stress due to lattice mismatch, misfit dislocation substructure, and applied stress on multilayer strength. To do so, we study the propagation of existing threading and interfacial dislocations as the applied stress is increased to the macroyield point. Our results show that in region 2, dislocation propagation is confined to individual layers initially. This “confined layer slip” builds up interfacial content and redistributes stress so that ultimately, the structure can no longer confine slip. The associated macroyield stress in this region depends strongly on layer thickness. In region 3, layers are so thin that confined layer slip is not possible and the macroyield stress reaches a plateau that is independent of layer thickness.