We propose a method for solving the vibrational Schrodinger equation with which one can compute hundreds of energy levels of seven-atom molecules using at most a few gigabytes of memory. It uses nested contractions in conjunction with the reduced-rank block power method (RRBPM) described in J. Chem. Phys. 2014, 140, 174111. Successive basis contractions are organized into a tree, the nodes of which are associated with eigenfunctions of reduced-dimension Hamiltonians. The RRBPM is used recursively to compute eigenfunctions of nodes in bases of products of reduced-dimension eigenfunctions of nodes with fewer coordinates. The corresponding vectors are tensors in what is called CP-format. The final wave functions are therefore represented in a hierarchical CP-format. Computational efficiency and accuracy are significantly improved by representing the Hamiltonian in the same hierarchical format as the wave function. We demonstrate that with this hierarchical RRBPM it is possible to compute energy levels of a 64-D coupled-oscillator model Hamiltonian and also of acetonitrile (CH3CN) and ethylene oxide (C2H4O), for which we use quartic potentials. The most accurate acetonitrile calculation uses 139 MB of memory and takes 3.2 h on a single processor. The most accurate ethylene oxide calculation uses 6.1 GB of memory and takes 14 d on 63 processors. The hierarchical RRBPM shatters the memory barrier that impedes the calculation of vibrational spectra.