The 02 Series sports sedans came into being after the racing and rally successes of the Neue Klasse sedans. Despite BMW's still-tentative grip on profitability, a smaller, lighter and more compact 2-door version was penned under BMW's Design Director Wilhelm Hofmeister by in-house designers Georg Bertram and Manfred Rennen.[4] Using Falkenhausen's remarkable M10 four-cylinder engine and chassis components, the 1600-2 (the -2 as in 2-door) or later, simply "1602" and "1600" made its debut at the Geneva auto show in 1966[5] and was sold through 1975. Power output of the M10 was up to 96 hp (72 kW) gross with 91 lb·ft (123 N·m) of torque. Within two years Road & Track was sufficiently impressed by the $2676 (US) 1968 1600 to call it "a great automobile at the price".

A limited-production cabriolet was produced by Baur from 1967 through 1971. A 2-door sedan version, the 1600ti, featured the dual Solex PHH side-draft carburetors (as found on the 1800TI) and 105 hp (78 kW) for 1967 and 1968. A hatchback 1600 Touring model was produced in 1971 and 1972.