I have read several posts about a squeek in the rear of many e38's, mine is a 1998 740il. It sounds like a very loud squeeky bedspring coming from the rear of the car. I checked the parking brake grommet which is still in great condition and have replaced the rear parking brake shoes. (I found several posts stating these were possible causes.) They were pretty rusty but the squeek is still there. You hear it everytime you get in and out of the car and when driving down the road. I also put new lower ball joints in the rear as well. I was hoping someone may have some further advise as I think my next step is to try new rear struts?? Thanks for any help or advise you could give.

I have a 99 740i and had the same problem. There is a control arm in the rear with a rubber boot near the outside by the tire - that is what is squeeking. Two options replace the arm or take a hypodermic needle fill with grease and inject into the boot. I have done the latter on both sides takes a couple of weeks for the grease to work in. IF that does not work you will need to replace the part at 2 to 300 bucks each. Good luck - that squeek is really annoying.

+1

I say control arm.

I found an eBay store that sells them cheap. Go to http://search.stores.ebay.com/FCP-Groton_e38_W0QQfciZ14QQfclZ4QQfsnZFCPQ20GrotonQQfs ooZ2QQfsopZ3QQftsZ2QQsaselZ13397707QQsofpZ0

A couple of guys on this forum have bought from there. I haven't, but I've heard nothing but good feedback.

I agree that it's the conrol arm, I had the same problum.
a new control arm from the dealer cost me $150, it's made by TRW

Another thing,
If you decide to try using grease like Cincyrob mentioned. You may want to lift the car and see if the wheel wobbles. Mine was so worn the wheel was wobbling back and forth noticeably.
I had my ex-wife lift the car while I checked the wheel; you may want to use a jack! :D :D :D