In communication systems, hierarchical modulation is used to increase system robustness and to send different information flows simultaneously. However, when used in cooperative communication systems, hierarchical modulation is prone to error propagation, which is the most important problem that prevents the achievement of full diversity gains. Depending on the signal-to-noise ratio between the source and the relay, threshold digital relaying can be used to mitigate error propagation. Mitigating error propagation and achieving full diversity depend on setting the thresholds at the relay properly. In this paper, the first and second threshold values are determined so that full diversity gains are attained for both base and enhancement layer bits. Analytical and simulation results are provided to show that the threshold values must depend on the hierarchy parameter.