Recently, a multi-level hp-version of the finite element method (FEM) was proposed to ease the difficulties of treating hanging nodes, while providing full hp-approximation capabilities. In the original paper, the refinement procedure made use of a-priori knowledge of the solution. However, adaptive procedures can produce discretizations which are more effective than an intuitive choice of element sizes h and polynomial degree distributions p. This is particularly prominent when a-priori knowledge of the solution is only vague or unavailable. The present contribution demonstrates that multi-level hp-adaptive schemes can be efficiently driven by an explicit a-posteriori error estimator. To this end, we adopt the classical residual-based error estimator. The main insight here is that its extension to multi-level hp-FEM is possible by considering the refined-most overlay elements as integration domains. We demonstrate on several two- and three-dimensional examples that exponential convergence rates can be obtained.