Inflation targeting is nowadays used by around 40 countries, with each of them tailoring some features of the strategy to its own needs. This holdse specially for deciding on the level of inflation targets. The analysis conducted in the paper aims at identifying factors affecting the choice of the target levels, with macroeconomic, structural and institutional characteristics of the reviewed economies being investigated. The main conclusion is that both backward- and forward-looking models can help to explain how inflation targets are set. Evidently inflation and GDP growth (past and forecast) together within formation on a possibly on going disinflation process are of key importance,but – especially for emerging market economies – also inflation variance and the level of economic development seem to influence the target levels. Moreover,many of the institutional features related, among others, to transparency and accountability of the reviewed central banks, were found significant in the analysis.