First introduced in 1992, the E36 generation of the venerable M3 was initially available only in a coupe configuration, with a sedan and convertible version introduced later. These early cars were all fitted with a 5-speed manual transmission and the 3.0 L S50 I6 engine that put out 282 hp in Europe and most other countries. The US version of the car received the downgraded S50B30US engine version, which put out a lesser 240 hp and used single-piece brake rotors rather than floating rotors. Another important difference was in the headlights, as Euro-spec headlights featured glass lenses and projectors, while US-spec headlights used plastic lenses and omitted the superior ellipsoid projectors.

The 1996 model year brought a refresh to the E36 chassis. With this update, BMW introduced the "Evolution" moniker to emphasize the performance upgrades. However, this new Evo version was only available in the European market, disappointing many enthusiasts stateside at the time. Visual changes were minimal, limited to new wheels, clear indicator lenses, a revised double kidney grille, and integration of the third brake light into the spoiler.

Most significantly, the Evolution models received a much-needed 6-speed manual transmission and an upgraded 3.2L S50 I6 engine producing 321 hp. This new 3.2L unit benefitted from an increased compression ratio, lightweight pistons, graphite connecting rods, and a revised exhaust manifold, among other enhancements, providing a welcome power boost. In contrast, the US-spec post-facelift version retained the original 240 hp 3.2L engine paired with a 5-speed manual, leaving many American enthusiasts longing for the upgraded European model they could not obtain.