With design selection in 1992, the series development phase began and took 39 months until start of production.

[13][14] Dealer demonstrator cars became available from September 1995 in continental Europe, commencing full scale production.

[16]: 7 The E39 was one of the first vehicles (alongside the E38 7 Series) to have curtain airbags, which protect the occupants' heads in a side impact.

[17] Standard equipment on the launch models included dual front and side airbags, pretensioners and load limiters for the front seatbelts,[18] anti-lock brakes, traction control, power steering, and air conditioning.

[21][22] Special options available options on wagon models were either a roller blind or extending boot cover with patrician net for the rear boot area, roller sun visors for rear and side windows.

[25][26] The accumulator stores engine heat by converting a salt from solid to liquid form (phase transition).

Six-cylinder pre-facelift cars built for the Japanese market were fitted with the Jatco 5R01 5 speed automatic transmission.

Torsional rigidity was increased over the E34 by 40 percent, which reduces body flex and allows the suspension to operate more accurately, also improving ride quality.

The wagon version was 85 mm (3.3 in) longer than the previous generation (E34) and weighed approximately 40 kg (88 lb) more.

Aluminium is used for the steering knuckles, outer strut tube and the spring pads, resulting in a weight saving of 21 kg (46 lb).

[46] V8 models also use aluminium in the steering box and several suspension links,[46] to compensate for the heavier steel subframe.

The rear suspension consists of a four link design (called "Z-link"), which is similar to the system used by the E38 7 Series.

The design minimises unintentional toe angle changes, which increases the stability of the handling.

[52] This "self leveling" system controls the ride height of the rear of the vehicle and is designed to keep the centre of the wheel a specified distance from the lip of the fender as the weight of the load in the boot area varies.

[53] When a door or the rear hatch is opened and then closed the control module will constantly monitor the input signals from the HALL sensors and will activate a correction if the ride height has change greater than 10mm.

The Alpina B10 3.2, 3.3, V8 and V8S petrol-engined models were built in saloons and wagon body styles based on the E39 from January 1997 to May 2004.

The engine is a 6 cylinder petrol producing 260 bhp and 330 nm of torque to the rear driving wheels.

The engine is a 6 cylinder petrol producing 280 bhp and 335 nm of torque to the rear driving wheels.

The engine is an 8 cylinder petrol producing 340 bhp and 470 nm of torque to the rear driving wheels.

The engine is an 8 cylinder petrol producing 347 bhp and 480 nm of torque to the rear driving wheels.

The engine is an 8 cylinder petrol producing 347 bhp and 480 nm of torque to the rear driving wheels.

The engine is an 8 cylinder petrol producing 375 bhp and 510 nm of torque to the rear driving wheels.

It was first shown to the public in 1999 at the Geneva Motor show The engine was a 6 cylinder diesel producing 500 nm of torque to the rear driving wheels.

[54] The 540i Protection light-armored vehicle was launched in Europe in September 1997 and in North America from January 1998.

[55] These models included aramid fibre armor, bullet-resistant glass that is coated with polycarbonate to reduce spall.

In 2003 BMW sold the 540i M-Sport package as a limited production model in the United States, with 1,190 cars produced with a manual transmission.

[citation needed] Most cars were built at the Dingolfing factory,[49]: 40,46–48  with complete knock-down assembly used in Mexico,[91][92] Indonesia and Russia.