When using the Java compiler (javac), we can specify two kinds of compatibility. One is using -source and the other is using -target.
The -source indicates what level of compliance your source code has: are you using Annotations? Then you would need at least 1.5; are you using @override on interface implementations, you would need 1.6 etc
The -target specifies what Java version you want to be able to run your classes on. You could use a Java SE 7 compiler and compile to run on Java SE 1.5.