cooling system

I don't work on many BMWs but from what I hear BMWs have the same problems as Jaguar and VW of the same era. They used water pumps that had plastic impeller blades. The blades failed and fell off ,deteriorated and broke or just slipped on the shaft. Seen it on other cars. The aftermarket pumps and replacement pumps have metal blades. Just a thought. Perhaps call an independent BMW shop and ask them if they have seen this problem with the 97 Z3s?

There are 2 fans on this vehicle. The main cooling fan, with the fan clutch, and the auxiliary Fan, in front of the Radiator, A/C Condenser in the front bumper cover. From what you have posted, I'm going to say the Aux Fan is working properly. My first suspect would be the Fan Clutch on the main Fan, a common repair. The Fan Clutch screws onto the water pump, so, as long as the engine is turning, so will the Fan. But the fan clutch is Thermo-Coupling and suppose to "clamp" down as it heats up. There is a simple test to check this, but I DO NOT recommend it for the general public. I recommend taking it to a shop (preferably one that primarily deals with European Cars) and tell them you suspect your Fan Clutch has failed. They should be able to tell you yeah or nay in about 3 minutes.