Driving a CMOS 1.8V input with a CMOS 5V output
The pullup is from the input to the 1.8V supply. 







simulate this circuit &ndash; Schematic created using CircuitLab

It would be better to use either a specific level shifter chip (the kind with two supply pins) or a transistor rather than a voltage divider. The maximum '0' input level is only 350mV not accounting for any noise margin. If you pick 200mV as the output voltage that is acceptable for the output you need less than 625\$\Omega\$ for the lower resistance, so a fair bit of current from the AVR, but probably okay (1.1K + 620 maybe, but check how close to 5.0V the AVR output is when sourcing ~3mA).