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Unlike most other BMWs the Z3 does not have an electric water pump for the heater. This means it is sensitve to air locks in the system. Eventuly these should clear themselves. Mine took a week to come back to full operation after replacing the coolent and bleading the system as per the instructions.

I think the overdrive observation is just a red herring and the heater will work once the engine exceeds about 1500 rpm for a while.

Make sure the coolent and oil levels are correct and try holding the car in a lower gear for a minute or so at 4000-5000 rpm while driving. This should force the air out of the system.

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Q: Why does the heater only work when the car go into overdrive then stops when it deaccelerates?
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