The inherent nature of cognitive radio (CR) networks has brought new threats to wireless communications. Primary user emulation attack (PUEA) has been widely studied as a serious threat to cooperative spectrum sensing (CSS) in CR networks. In PUEA, a malicious user can obstruct CR users from accessing idle frequency bands by imitating licensed primary user (PU) signal characteristics. The present study introduces a new CSS scheme in the presence of a malicious PUEA based on multi-level hypothesis testing (MLHT). In the proposed method, generalizing from binary hypothesis testing to MLHT, we partition the decision space to four decision options and apply minimum Bayes cost criteria to determine the channel status. We also discuss practical limitation issues that need to be considered when applying the MLHT approach. Simulation results are provided to indicate the performance improvement of the proposed MLHT method against PUEA, compared with the conventional method.