The spatial organization of chromatin in the nucleus has been implicated in regulating gene expression. Maps of high-frequency interactions between different segments of chromatin have revealed topologically associating domains (TADs), within which most of the regulatory interactions are thought to occur. TADs are not homogeneous structural units but appear to be organized into a hierarchy. We present OnTAD, an optimized nested TAD caller from Hi-C data, to identify hierarchical TADs. OnTAD reveals new biological insights into the role of different TAD levels, boundary usage in gene regulation, the loop extrusion model, and compartmental domains. OnTAD is available at https://github.com/anlin00007/OnTAD.