Helmut Werner Bönsch, BMW's director of product planning, and Alex von Falkenhausen, designer of the company’s M10 engine, each had a two-litre version of the M10 installed in a 1600-2 for their personal use. When they realized they had both made the same modification to their own cars, they prepared a joint proposal to BMW's board to manufacture a two-litre version of the 1600-2.[3][1] At the same time, American importer Max Hoffman was asking BMW for a sportier version of the 02 series that could be sold in the United States.

As per the larger coupe and 4-door sedan models, the 2.0 engine was initially sold in two states of tune: the base single-carburetor 2002 producing 100 PS (74 kW; 99 hp) and the dual-carburetor high compression 2002 ti producing 120 PS (88 kW; 118 hp).[2] The 2002 Automatic, with the base engine and a ZF 3HP12 3 speed automatic transmission, became available in 1969.[2] The 2002 ti was replaced in 1971 by the 2002 tii, which used the fuel-injected 130 PS (96 kW; 128 hp) engine from the 2000 tii, delivering a top speed of 185 km/h (115 mph).