Here are two procedures:
Get two quarts of the best synthetic ATF from your auto parts store. I used Mobil 1.
Extract as much of the fluid from the reservoir as you can, using a turkey baster.
Optional: remove the reservoir and flush it out with gasoline. I did this, since the filter inside is not removable.
Remove the return hose from the reservoir. It’s the forward hose, coming from the radiator, and into the bottom center of the reservoir. Have something ready to plug the reservoir pipe, and catch any residual fluid in the reservoir. I used a rubber cap, designed to cap off vacuum lines, and a couple of shop rags. You’ll need a new hose clamp.
BTW, this center clamp allows a leak to develop. Best to replace it anyway.
Fit a length of rubber hose onto, or into, the return hose so that you can route it into a catch can of at least two quart capacity. I used a cut-off bleach bottle, since, being white, it is easier to do the next step, as well being an easy target for the stream of fluid.
Fill the reservoir with new fluid. Have both bottles of ATF open and handy. With one hand on the hose, aiming into the bucket, and the other on the bottle of ATF, have a helper start the engine. Keep pouring ATF into the reservoir until fresh fluid comes out into the bucket. Then shut off the engine, reattach the hose, and top up the reservoir.
DO NOT move the steering wheel with the return hose disconnected, and the engine running! It will pump lots more fluid, and, if the hose is not restrained, it will blow fluid all over!
Optional Dave “Roadfly” Kowached Method
Every night, after coming home from work, extract as much fluid from the reservoir as possible. Fill with fresh fluid. After running two quarts through this way, the system will be much cleaner.
Once cleaned this way, do one reservoir-full at each oil change.
Ed in San Jose '97 540i 6 speed aspensilber over aubergine leather. Build date 3/97. Golden Gate Chapter BMW CCA Nr 62319.