Originally posted at http://mywebpages.comcast.net/gsussman/fuel_filter_replacement.htm

Fuel Filter Replacement

Approximate Time Required: 2 hours

Start by jacking up the passenger's side of the car. Use whatever safe means you have available to get the car high enough into the air for you to crawl under it.

REMEMBER: Never crawl under a car that is on a jack. Always put the car onto jackstands before crawling under.

For those without a jack/jackstands or ramps, I have heard of other owners running one front and one rear wheel up onto a curb, such as the edge of  a driveway ramp, to get one side of the car up. While somewhat inconvenient to work under, this method is probably one of the safest with regard to the car falling on you.

Once the passenger's side of the car is up, remove the plastic cover on the under body. It is held on by a few small bolts and some plastic fasteners. The fuel filter resides directly under this cover.

If the car has been running recently, take care when removing the bolts on the inside edge of the cover, they are pretty close to the exhaust pipes (HOT!)

The position of the cover in the picture is a little to the rear of it's actual mounting position. In actuality, the forward edge of the cover meets the bottom edge of the wheel well. (My jackstand was in the way).

With the cover removed, looking under the car should reveal the fuel filter. It is a silver can about 2 1/2" in diameter and about 11" long.
BEFORE YOU DO ANYTHING, ensure you have a clamp of some sort to clamp off the supply side of the filter. If you fail to do this, when either side of the filter is disconnected, you will start to siphon fuel from the tank and end up with a huge puddle of gas. (No Smoking Please!)

BMW sells a special tool for doing this, but a pair of needle nose vise grips with vinyl jaw covers worked just as well.

The filter is held on with a single hex key bolt in a wrap band around it's middle (seen on the right side of the photo) Once that is off, only the fuel lines hold it in place.

Remove the hose clamps, replace the filter and hose clamps, and reassemble in the reverse order.

Note: The hose clamps BMW uses on the fuel system are of a special type with a torque limiting connector that shears off when the proper torque value has been reached. These clamps are not reusable, and must be replaced. When you purchase your filter, you might as well pick up a couple (3) of these. One extra for the Murphy's Law factor.