In lung stereotactic body radiotherapy (SBRT) cases, the pencil beam (PB) dose calculation algorithm is known to overestimate target dose as compared to the more accurate Monte Carlo (MC) algorithm. We investigated whether changing the normalized prescription isodose line affected the magnitude of MC vs. PB target dose differences. Forty‐eight patient plans and twenty virtual‐tumor phantom plans were studied. For patient plans, four alternative plans prescribed to 60%, 70%, 80%, and 90% isodose lines were each created for 12 patients who previously received lung SBRT treatments. Using 6 MV dynamic conformal arcs, the plans were individually optimized to achieve similar dose coverage and conformity for all plans of the same patient, albeit at the different prescription levels. These plans, having used a PB algorithm, were all recalculated with MC to compare the target dose differences. The relative MC vs. PB target dose variations were investigated by comparing PTV D95, Dmean, and D5 loss at the four prescription levels. The MC‐to‐PB ratio of the plan heterogeneity index (HI) was also evaluated and compared among different isodose levels. To definitively demonstrate the cause of the isodose line dependence, a simulated phantom study was conducted using simple, spherical virtual tumors planned with uniform block margins. The tumor size and beam energy were also altered in the phantom study to investigate the interplay between these confounding factors and the isodose line effect. The magnitude of the target dose overestimation by PB was greater for higher prescription isodose levels. The MC vs. PB reduction in the target dose coverage indices, D95 and V100 of PTV, were found to monotonically increase with increasing isodose lines from 60% to 90%, resulting in more pronounced target dose coverage deficiency at higher isodose prescription levels. No isodose level‐dependent trend was observed for the dose errors in the target mean or high dose indices, Dmean or D5. The phantom study demonstrated that the observed isodose level dependence was caused by different beam margins used for the different isodose levels: a higher prescription line required a larger beam margin, leading to more low‐density lung tissues in the field and, therefore, larger dose errors at the target periphery (when calculated with PB). The phantom study also found that the observed isodose level dependence was greater for smaller targets and for higher beam energies. We hereby characterized the effect of normalized prescription isodose line on magnitude of PTV dose coverage as calculated by MC vs. PB. When comparing reported MC dose deficiency values for different patients, the selection of prescription isodose line should be considered in addition to other factors known to affect differences in calculated doses between various algorithms.PACS number(s): 87.55.kh, 87.55.dk, 87.55.de