An (r,λ)-design with mutually balanced nested subdesigns ( for brevity, (r,λ)-design with MBN ) is introduced firstly in this paper. It is shown that an (r,λ)design with MBN is equivalent to a balanced array of strength 2 with s symbols. By the use of a nested design and an orthogonal array, a construction of an (r,λ)design with MBN is given. A direct construction of such an (r,λ)-design, based...