The car is based on the BMW M Roadster. The semi-trailing arm rear suspension was not modified from the M Roadster. The coupe is 2.7 times stiffer than its convertible counterpart, resulting in superior handling.

The M coupe was developed under the leadership of engineer Burkhard Göschel with the intention of adding increased torsional and structural rigidity to the Z3 roadster’s chassis. The development team had a hard time convincing the Board of Directors to approve the model for production, but it was eventually given the green light as long as it remained cost-effective to produce. To achieve this goal, as many body panels as possible had to be shared with the roadster, thus the doors and everything from the A-pillar forward are interchangeable between the coupe and roadster, as are most interior parts. The Z3 coupe, which mates the M coupe's body with the standard Z3 drivetrain, chassis and cosmetics was approved for production at the same time.