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It means that the computer isn't getting a reading from that sensor--either the sensor
on that bank is shot--or you have a short in the electrical connection-or a broken electrical
connection.
If you have over 100k miles on the precat sensors they need to be replaced.
 

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Open the hood and look at the exhaust manifold. That should be the sensor that is the closest to the front of the car.

You should check the wiring - 74K is sort of low to expect a failure. My 2001 530 has about 80K and sensor sare in good shape.
 

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Early, but not at all uncommon to fail. If the connections all look good, I would just go ahead and replace it...in fact replace both pre cat O2 sensors, and save yourself some work. My 2001 540 had one pre cat O2 sensor failur at around 30k miles and three years. I've had them fail on other cars (usually the heater circuit on the O2 sensor) well before 50k miles. These are all Bosch brand oem O2 sensors too, just like used on BMWs.
 
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