I’m by no means the first to pull the BMW 6 speed swap, but it’s not nearly as common as say the 2ZZ-GE swap into an MR2 Spyder.  Why do this?  The general consensus is that the 6-speed box out of the M3 is smoother shifting.  The stock 5-speed in the M Coupe has no overdrive, 5th gear is a 1:1.  Everything stock, not such an issue.  BMW installed an incredibly tall geared differential in the M Coupes (lower numerically.)  3.15 to be precise when talking S54 flavor (’01-’02.)  Meanwhile, the M3 (with an identical engine) received much lower gearing (~3.64 if my memory serves me.)  Of course some of this balances out with the rolling diameters (17″ vs 18-19″ wheels.)  But it’s just another handicap to the M Coupe, much like the lowered rev-limiter.  I’m thinking Big BMW didn’t want the red-headed M Coupe outshining its perennial performer and cash cow, the M3.  So, if you plan to go the poor-man’s supercharger route and drop a lower gear rear-end in your Coupe, then you have to contend with increased RPMs at cruise.  The answer: overdrive.  The E46 M3 box’s 1-5 ratios are identical to the E36′s, but with the addition of the overdrive at 6.

5speed vs 6speed

Longer 6 speed from an E46 M3 on left, 5 speed from an E36/8 M Coupe on the right.

Now the more popular swap seems to be the E36 M3 Evo 6-speed.  The reasoning: it shares all the clutch/flywheel parts with the Z3M’s.  The major hang up with going this route; M3 Evos were never offered in North America.  So, if you wish to go this route, then you must hunt one down from Europe and pay the shipping stateside.  Many have done this, but the E46 M3 is a more plentiful option.  I picked mine up off of a Car-Parts.com, had it freight shipped on a pallet.  Just look for the lowest mileage you can find, make sure you don’t get an SMG box.

E46 M3 6 Speed

The E46 M3 6 Speed looks nearly identical to the 5-speed.

I won’t cover the in’s and out’s of R&R’ing a transmission.  Bottomline: it’s a bear.  Look here for a pretty in-depth guide: http://webspace.ringling.edu/~dplassma/cj/cj.html

Other items you’ll need, since you are using an E46 box: E46 M3 Clutch, flywheel, pilot bearing.  Bimmerzone had by far the best prices.  At first I picked up a couple used pieces from the M3 forums, but my pessimism prevailed and I went with new parts.  Glad I did, as R&R’ing a gearbox in this car is quite the chore.  You’ll also need a 6-speed crossmember from an E36 Evo (PN: 23702227892), fortunately they are readily available new and cheap.  That and the necessary bolts for the flywheel/clutch are all you need to purchase new.  Of course I would highly recommend taking care of the flex joint (giubo) during this job, as well as the shifter bushing (I went with RE Delrin bits.)  While you’re at it, might as well change out those sloppy hourglass rubber transmission mounts.  I went with Rogue mounts, which are still rubber isolators, but a cylindrical shape for reduced movement.

E36 M3 Evo Crossmember

Here’s a short list of the required parts:
21212229900  E46 M3 Flywheel
21212282667   E46 M3 Clutch
11222243051   Flywheel bolts (qty 8)
23702227892   E36 M3 Evo transmission crossmember
21207548052   Clutch screws (qty 6)
11211720310   Pilot bearing

Now for the custom work.  Your drive shaft must be reduced approximately 4″.  Your best bet is to take accurate measurements once the new 6-speed is installed.  Any competent driveshaft shop will have a measurements sheet to show you exactly how and where to measure.  Generally it’s from the rear-face of the guibo to the center of the hanger bearing.  I had my driveshaft rebuilt at the same time, and a high speed balance is necessary (remember an S54 can exceed 8k rpm.)

Rebuilt & Shortened Driveshaft

Freshly rebuilt driveshaft, new U-joints, carrier bearing, and painted

Shifter Rod

Steel rod machined to fit and inserted.

You’ll also need to shorten both your shifter carrier and shift rod.  Both are shortened 91mm.  Since the shifter carrier is cast aluminum, and I only have a MIG, I took it to a shop to have it cut and welded.  The shifter rod is zinc plated steel.  I simply cut it with a fine-tooth hack saw.  To add some rigidity and also inertia to the shifting action, I inserted a solid steel rod into the hollow rod.  The inside diameter is just shy of 5/8″, so it required a bit of machine work.  I picked up the solid 5/8″ rod from Lowes, then took it and the two halves of my shift rod to a machine shop.  I had them lathe away just enough material so the rod could be inserted with a little friction (~ .005″ IIRC.)

Assembling the two halves of the shift rod. The two halves assembled, clamped in place

The solid rod was cut to size and inserted inside and between my two remaining shifter rods.  NOTE: The stock shifter rod has a very slight twist to it to exactly center the shift knob.  This twist is hardly noticeable with the naked eye, but it’s there.  So rather than welding the rod on the bench and just eyeballing the alignment, I installed the rod in the car first.  I used a pair of Vise-Grips to hold it steady, making sure the shift knob was perfectly centered.  Once I was satisfied, I removed it again and burned the pieces together.  Some hand filing left it looking like one solid piece, which I suppose it technically is.  Gave it a coat of black enamel, then in it went.

The two halves welded together and filed smooth.Painted with some Rustoleum epoxy black.

Shifter rod and shifter carrier

As for the clutch slave cylinder; you must utilize the stock Z3M cylinder.  The E46 uses a completely different master, so the ratios would not match.  The Z3M slave will match right up, but the stand-off bracket for the hydraulic hard-line will require some clearancing due to interference with aluminum casting on the bellhousing.  Easy work for a carbide and die grinder.  If you haven’t already, now’s the time to rid yourself of the Clutch Delay Valve (CDV) found inline with the stock rubber clutch hose.  I chose to use an Rogue Engineering (RE) braided stainless steel line.  Then you have all the fun of bleeding that god-forsaken clutch slave cylinder.  Will someone please find the poor excuse for an engineer you placed the bleed nipple on the bottom.

Don’t forget to top it all off with a ZHP illuminated 6-speed knob:http://stores.ebay.com/spitzbube85?_trksid=p2047675.l2563

2012-11-04_00-53-04_849UPDATE: I ended up removing the RE short shift and ZHP knob.  I liked the weight and feel of the combination, but it was simply too low for me.  My elbow would interfere with the center console, making shifts difficult.  I ended up reinstalling the stock shifter and getting a tall Delrin knob, which is a much better combination.  The stock Z3M shifter is already a “short” shifter compared to the normal E36 shifter, in fact many folks use it as an upgrade.

My custom made Delrin shifter knob.

New Black Delrin Knob Installed