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I have a E46 (1998) 328i and I'm pretty sure its the same engine. Anyway the thermostat on my engine is located behind the viscous fan and approx 9inches above the center of the fan. The viscous fan drives the water pump and the thermostat housing is just above the water pump at the front of the engine. The thermostat is a one piece unit and is a bit expensive £55 at dealers £42 independent. You will need to remove the viscous fan to get at it there are special spanners for this and its a 30mm socket left hand thread ( screws off clockwise). I had to put a steel chisel on one corner and give it a sharp smack to loosen off. Be patient it took me an hour to get the dam thing off. You will also need to remove the plastic shroud surrounding the fan. I suggest you take digital photos as you go along as back up reference and keep all fixings.

good luck

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Q: Where is the thermostat located on a 1996 BMW 528I SE?
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