The C-series engines are based on the BMW M20 inline-6 engine.

All engine variants were also available as aftermarket upgrade kit.

The C1 engine was based on the M20B23 engine from the 323i with 141bhp (105kW) and 190Nm. This engine was introduced as aftermarket upgrade for 320i and 323i in 1977 and as an official model in the C1 2.3 in early 1980. Modifications included Mahle pistons, camshaft, cylinderhead and Gillet exhaust.

The C1/1 engine was based on the M20B23 engine from the 323i with 137bhp (102kW) and 205Nm. It was introduced in the C1 2.3/1 in late 1982. Modifications included pistons, throttle body, camshaft, cylinderhead, exhaust and reprogrammed engine management.

The C2 engine was based on the M20B23 engine from the 323i with 137bhp (102kW) and 205Nm. It was introduced in the C2 2.5 in late 1985. Cylinder bore was increased from 80mm to 84mm, however the stock crankshaft was retained resulting in engine displacement of 2552cc. Modifications included pistons, throttle body, intake manifold, camshaft, cylinderhead, performance exhaust manifold, exhaust and reprogrammed engine management. Additionally, an oil cooler was installed.

The C2/1 engine was based on the M20B27 engine from the 325e with 123bhp (92kW) and 240Nm. It was introduced in the C2 2.7 in early 1986. The 200 cylinderhead from the 325e was used. Modifications included pistons, throttle body, camshaft, cylinderhead, performance exhaust manifold, exhaust and reprogrammed engine management.

The C2/2 engine is based on the M20B25 engine from the 325i with 174bhp (130kW) and 226Nm. The C2/2 engine was introduced in the C2 2.7 in early 1987 and B3 2.7 in late 1987. The crankshaft from the 325e was installed, resulting in engine capacity of 2693cc. Flat Mahle pistons were installed in engines equipped with the 731 cylinderhead with compression ratio 10.1:1. Domed KS pistons were installed in engines equipped with the 885 cylinderhead and catalytic convertor with compression ratio 9.6:1. Modifications included pistons, throttle body, camshaft, cylinderhead, performance exhaust manifold, exhaust and reprogrammed engine management.

The C2/3 engine is based on the M20B25 engine from the 325i with 174bhp (130kW) and 226Nm. The C2/3 engine was introduced in the C1 2.5 in late 1986. Uncharacteristically, engine internals were not changed. Modifications included throttle body, camshaft, exhaust and reprogrammed engine management.

The C2/6 is a slightly modified version of the C2/2 engine to fit in the Z1 bodyshell. It was introduced in the RLE in late 1989.

BMW South Africa sourced components from the C2/2 engine to produce a M20B27 engine for Group N production car racing. The first version of this engine with a non-Alpina camshaft produced 197bhp (145kW). It was introduced in the 325iS Evo in early 1990. The second version of this engine used a 535i throttle body and produced 204bhp (155kW). It was introduced in the 325iS Evo2 (HP2) in early 1991.