Run a full-synthetic oil meeting BMW Longlife-01 (LL-01) / ACEA A3/B4 in any E36. 5W-40 is the safe all-round grade for most climates; BMW's period chart also allows 5W-30 and 10W-40 by temperature. M3 owners often run 10W-60 for hard track use — that's an enthusiast call for sustained high oil temps, not the baseline.
Capacities with a filter change:
- M50/M52 six (320i-328i): about 6.5 litres
- M42/M44 four: about 4.0-4.5 litres
- S50/S52 M3: about 6.0-6.5 litres
Always finish to the dipstick rather than trusting the quoted number.
Change it every 5,000-7,500 miles or once a year — these engines last far better on that than on BMW's stretched Longlife interval. And don't confuse this with gearbox fluid: the manual and automatic take ATF/MTF, the engine takes the oil above.