diff --git a/doc/source/whatsnew/v1.3.0.rst b/doc/source/whatsnew/v1.3.0.rst
index d654cf5715bdf..3768af266339d 100644
--- a/doc/source/whatsnew/v1.3.0.rst
+++ b/doc/source/whatsnew/v1.3.0.rst
@@ -681,6 +681,7 @@ Deprecations
 - Deprecated passing arguments as positional in :meth:`DataFrame.clip` and :meth:`Series.clip` (other than ``"upper"`` and ``"lower"``) (:issue:`41485`)
 - Deprecated special treatment of lists with first element a Categorical in the :class:`DataFrame` constructor; pass as ``pd.DataFrame({col: categorical, ...})`` instead (:issue:`38845`)
 - Deprecated passing arguments as positional (except for ``"method"``) in :meth:`DataFrame.interpolate` and :meth:`Series.interpolate` (:issue:`41485`)
+- Deprecated passing arguments as positional (except for ``"levels"``) in :meth:`MultiIndex.set_levels` (:issue:`41485`)
 - Deprecated passing arguments as positional in :meth:`DataFrame.sort_index` and :meth:`Series.sort_index` (:issue:`41485`)
 - Deprecated passing arguments as positional in :meth:`DataFrame.drop_duplicates` (except for ``subset``), :meth:`Series.drop_duplicates`, :meth:`Index.drop_duplicates` and :meth:`MultiIndex.drop_duplicates`(:issue:`41485`)
 - Deprecated passing arguments (apart from ``value``) as positional in :meth:`DataFrame.fillna` and :meth:`Series.fillna` (:issue:`41485`)
diff --git a/pandas/core/indexes/multi.py b/pandas/core/indexes/multi.py
index 86d1503fe31c0..6a13ffa5a376b 100644
--- a/pandas/core/indexes/multi.py
+++ b/pandas/core/indexes/multi.py
@@ -804,6 +804,7 @@ def _set_levels(
 
         self._reset_cache()
 
+    @deprecate_nonkeyword_arguments(version=None, allowed_args=["self", "levels"])
     def set_levels(
         self, levels, level=None, inplace=None, verify_integrity: bool = True
     ):
@@ -895,7 +896,7 @@ def set_levels(
             warnings.warn(
                 "inplace is deprecated and will be removed in a future version.",
                 FutureWarning,
-                stacklevel=2,
+                stacklevel=3,
             )
         else:
             inplace = False
diff --git a/pandas/tests/indexes/multi/test_get_set.py b/pandas/tests/indexes/multi/test_get_set.py
index 0c561395788ad..9657e74c363b9 100644
--- a/pandas/tests/indexes/multi/test_get_set.py
+++ b/pandas/tests/indexes/multi/test_get_set.py
@@ -351,7 +351,7 @@ def test_set_levels_categorical(ordered):
     index = MultiIndex.from_arrays([list("xyzx"), [0, 1, 2, 3]])
 
     cidx = CategoricalIndex(list("bac"), ordered=ordered)
-    result = index.set_levels(cidx, 0)
+    result = index.set_levels(cidx, level=0)
     expected = MultiIndex(levels=[cidx, [0, 1, 2, 3]], codes=index.codes)
     tm.assert_index_equal(result, expected)
 
@@ -405,3 +405,30 @@ def test_set_levels_inplace_deprecated(idx, inplace):
 
     with tm.assert_produces_warning(FutureWarning):
         idx.set_levels(levels=new_level, level=1, inplace=inplace)
+
+
+def test_set_levels_pos_args_deprecation():
+    # https://github.com/pandas-dev/pandas/issues/41485
+    idx = MultiIndex.from_tuples(
+        [
+            (1, "one"),
+            (2, "one"),
+            (3, "one"),
+        ],
+        names=["foo", "bar"],
+    )
+    msg = (
+        r"In a future version of pandas all arguments of MultiIndex.set_levels except "
+        r"for the argument 'levels' will be keyword-only"
+    )
+    with tm.assert_produces_warning(FutureWarning, match=msg):
+        result = idx.set_levels(["a", "b", "c"], 0)
+    expected = MultiIndex.from_tuples(
+        [
+            ("a", "one"),
+            ("b", "one"),
+            ("c", "one"),
+        ],
+        names=["foo", "bar"],
+    )
+    tm.assert_index_equal(result, expected)