There are quite a few characteristics of the E36 M3 that made it famous. It has incredible balance in terms of power and handling, it has a rigid chassis, bulletproof engine options between the two US-Spec and one ROW-spec engine, they look freaking sick with proper fitment and some simple exterior upgrades, and they have dominated on the track for their entire thirty-year history. However, one of the aspects the E36 M3 is known for in a less than ideal way is that they are underpowered when compared to even the most mundane modern commuter cars and notoriously hard to improve without spending a lot of money. That said, it’s not impossible to take your less than 250hp S50/S52 and make it supremely capable with just a few upgrades, all without breaking the bank. We’re going to tell you how to make your E36 M3 more fun to drive with the best engine and software upgrades. 

Intake

While it isn’t going to absolutely change the game, moving your intake air filter away from the engine and enclosing it will help smooth out your air delivery and improve your performance somewhat. The aFe Power intakes are excellent choices. We don’t need to go into why upgrading your intake helps improve performance. If you need a refresher, check out our article on intake upgrades.

Intake Manifold

Pictured is the OBDII manifold

It’s a commonly accepted theory that the M50 OBDI intake manifold is superior to the OBDII in every way. The OBDI manifold has shorter, equal-length, and much larger diameter intake runners for improved airflow. The general consensus is that this upgrade is good for a solid 15hp gain across the rev range, a fact to which I can personally attest since I made this upgrade to my engine. However, it isn’t just a simple swap. You need to adapt the ICV, fuel rail, and a few other things so it can bolt up. For that, you have two options. Option one is to gather some silicone hoses, hose clamps, and zip ties to adapt it. We don’t think this is the best choice unless you don’t mind your engine bay looking like a construction site. Option two is more expensive, but certainly worth it. The more official-looking M50 Intake Manifold Adapter Kit comes with everything you need to properly adapt the manifold and even includes the necessary adapters to mount your fuel rail to the new manifold. 

Headers/Exhaust

Freeing up the other side of the engine with better flowing exhaust, you can experience noticeable gains and more enjoyable engine noises. Turner Motorsport headers bolt directly to the existing downpipes and catalytic converters, while a full Supersprint exhaust system is the best sounding and performing option, but it will cost you. Here are all our best choices for upgrading your M3’s exhaust.

Camshafts

Upgraded Shrick camshafts are a must for improving power in your E36 M3. These will give you more power on the top end and work well with the other upgrades on this list. Since the S5x is notorious for VANOS issues, we suggest doing the camshaft upgrades alongside your VANOS repair.

Pulleys/Accessory Deletes

Upgraded pulleys like the Turner Motorsport Power Pulleys help underdrive the engine accessories to prevent power that could go to wheel speed from being wasted on things like A/C and power steering. The cheapest option is just to delete anything you can live without. Deleting the power steering system, A/C, and underdriving your alternator can make your engine noticeably more responsive, but at a small cost to convenience.

Software Tune

The Shark Injector Software helps tie everything together. It raises the rev limit, removes the speed governor, and accounts for your upgraded camshafts/OBD1 intake manifold if you made those upgrades. This will be the most noticeable change in terms of performance, as it takes what you already have and uses those improvements more efficiently.

Wrapping Up

The E36 M3 can be improved to produce more power without spending excessive amounts of money. Of course, you can always go with forced induction or an engine swap, but we think this is the best road map to use the S50/S52 to the best of its ability and make your E36 enjoyable without ruining what makes the E36 M3 so special.