The BMW Z4 M (E85/E86) is powered by the naturally aspirated 3.2L S54 inline-six, producing 343 hp and 269 lb-ft of torque, paired with a 6-speed manual transmission and rear-wheel drive. Its chassis uses M-specific suspension tuning, a variable limited-slip differential, larger brakes, and reinforced components, while the engine's individual throttle bodies and high-revving design give it a direct response.

The Z4 M combines the compact Z4 platform with S54 power, hydraulic steering, rear-wheel drive, and a mechanical limited-slip differential. Its relatively low weight, short wheelbase, naturally aspirated engine, and manual gearbox give it a more mechanical character than many later BMW M cars, particularly as the brand moved toward turbocharged engines and electrically assisted steering.