Modified B5 Audi S4 2.7T Quattro
It's hard to believe the first B5 Audi S4 was rolling off the assembly line at the factory almost 20 years ago. Yeah, you read that right, twenty years ago (almost)! Since that time, plenty of aftermarket tuning companies have taken aim at improving the B5 S4 and everything its 2.7T powerplant has to offer. There's a plethora of information floating around in the web regarding the Do's and Don'ts of modifiying these cars, and sometimes it can be difficult to make sense of it all. Some suggestions are reasonable, addressing maintenance items and troublesome factory parts to improve reliability, while others throw caution to the wind and urge you to jump into upgraded turbos over all else.  For those looking to study up on Audi's biturbo 2.7T, and learn the basics of the emerging "modern classic" B5 S4, this article looks to provide you with a baseline of the top 6 modifications you can perform and why.
Lowered B5 Audi S4 Avant Quattro with BBS CH

Modification #1 - Stage 1 Tune

I think it's fair to say that if you're looking for the best "bang for your buck" upgrade for your B5 S4, a 2.7T Stage 1 Tune is it. This software flash can be performed in a matter of minutes through the car's OBD2 port and doesn't require any additional supporting modifications. This simple upgrade will transform the car from docile and dare I say sluggish, to an eager and willing machine that feels as if it should have come this way from the factory. Don't believe us? See the dyno graph below of a B5 S4 with only a Stage 1 tune and no additional modifications.
034Motorsport Stage 1 2.7T B5 Audi S4 91 Octane Tune
This is the only upgrade you will do for under $500 that will yield gains of 65HP and 87TQ! Be prepared however, because once you feel the newfound power you will be hooked.

Modification #2 - Upgraded Diverter Valves

Once the boost has been turned up in the form of the Stage 1 tune, this will start to flow significantly more air through the intake tracts of the motor, and push some components beyond what the factory had intended. The weakest, or first component to give after an ECU flash is likely to be the diverter valves (aka: bypass valves). Factory units are plastic, and use a fragile rubber diaphragm that are prone to ripping once boost levels exceed factory levels. Once a diverter valve has failed, your car will feel like it has gone from 100% to 1% and no longer be able to build boost.
Audi did eventually update their design with the 710N Bypass Valve, using reinforced rubber to withstand higher stress. For a bullet-proof solution however, we recommend upgrading to the 034Motorsport Bypass Valve. Constructed from billet aluminum, our valve features a spring and piston design that can handle increased boost pressures for a longer life than the factory units. They are direct replacements for the factory diverter valves, and are fully serviceable should you ever need to.
034Motorsport billet bypass valve diverter valve

Modification #3 - Rear Sway Bar

The layout of Audi's legendary Quattro drivetrain means that your engine is sitting almost entirely in front of the front axles on a B5 chassis car. This sort of weight distribution may help when searching for traction in near blizzard conditions, however having all of that dead weight hanging off the front of the car doesn't bode well when canyon carving. A stock B5 S4 wants to understeer and plow forward through a corner when pushed to the limit, that's just science. It's alright though, we've got just the answer to help neutralize the handling characteristics of the B5 and lessen body roll through the turns.
The 034Motorsport Solid Rear Sway Bar is constructed of 25.4mm diameter solid spring steel, and features two different settings to dial in the handling to your preferences. Compared to the stock rear sway bar, our bar boasts a 213% increased sway bar rate in the "soft" setting and an impressive 330% over the factory bar in the "stiff" setting. So long understeer! This will help the car to pivot through the corners and remain flat while doing so.  Where some companies sell front and rear sway bar sets to get the desired results, our bar was designed in conjunction with the factory front sway bar for optimum handling.
034motorsport B5 Solid Rear Sway Bar
Due to the stiffness of this sway bar, we require the use of our Rear Subframe Reinforcement Brackets to ensure everything stays mounted where it should, and the improved handling of your Audi B5 remains superb.

Modification #4 - Downpipes

Factory catalytic converters are notoriously restrictive. The reason for this is to help manufacturers meet strict emission standards and still offer a warranty on their performance-oriented cars. After all, we know what happens when a big auto manufacturer tries to be sneaky with emissions don't we?
Lucky for you, companies like Wagner Tuning make High Flow 2.7T Downpipes that replace the strangling factory catalytic converters with free flowing 100cpi racing cats (*sorry California, these may not be legal in all 50 states). Typically an exhaust setup without any catalytic converter will not pass any sort of emissions testing and can create some potent fumes when driving on the road. The best of both worlds can be reached when using a high-flow cat such as the Wagner offering. You will notice quicker spool and significant increased power across the powerband without the infamous stinky tailpipe associated with catless vehicles.
Wagner Tuning 2.7T High Flow Downpipe Kit
Turbocharged vehicles love free-flowing exhaust. The less restriction the better, and eliminating any sort of bottlenecks in the system will greatly improve power output throughout the rev range. So if you're looking to take the next step in power after a Stage 1 tune, upgraded downpipes are what you should be looking for.

Modification #5 - Throttle Body Boot

As we mentioned before, increased boost levels put more stress on a lot of the components found under your hood. Thankfully, a lot of the critical ones can handle the pressure. Some of the smaller items need a little reinforcement to continue performing at the levels you expect. One of the most common items to deteriorate into oblivion is the factory rubber throttle body boot. It sees a lot of heat, and a lot of pressure from the lead-footed driving you've likely been putting it through.
The 034Motorsport Silicone Throttle Body Intake Boot is a necessary upgrade for anybody running boost levels higher than factory. Modeled from the factory hose, this 4-ply reinforced silicone unit is a direct replacement that can withstand up to 22psi of boost. It also features a referencing ridge on the throttle body side to lock into the receiver groove on the throttle body and will remain there under the supplied T-bolt clamp locking the hose down. Don't hassle with ripped throttle body boots any longer and keep that boost pressure where it belongs!
Reinforced Silicone Throttle Body Intake Boot for Audi 2.7T

Modification #6 - Drivetrain Mounts

While "drivetrain mounts" are more of a category than a specific item, I feel that engine and transmission mounts are complementary and should be upgraded together to get the most out of one another. Factory engine mounts contain large voids in the middle that are filled with fluid to dampen vibrations caused from the motor. While that might sound nice and thoughtful from Audi, these mounts will fail over time and leak all of the fluid out. Fluid-filled mounts are necessarily the best in performance either, leaving much to be desired from an enthusiast.
Audi B5 S4 Density Line Motor Mount Pair
Reduce drivetrain slop and minimize wheel hop with upgraded Density Line Motor Mounts. These complete drop-in replacements feature zero voids in the rubber,and  are solid-filled to add strength and longevity compared to factory mounts. Choose between Street Density for a 10% stiffer mount and minimal increase in noise, vibration, or harshness, or Track Density for a 90% stiffer mount to truly eliminate any engine movement.
Density Line Transmission Mount for B5 Audi S4
The 034Motorsport Density Line Transmission Mount offers the same option of Street Density or Track Density to create a pairing with the density line motor mounts based on your desired performance. The new, stiffer rubber will create crisper shifting and a more connected feel between yourself and the car.
B5 Audi S4 2.7T in Alameda
Hopefully this article has covered some of the simple questions regarding which upgrades or modifications are best to do first on a B5 Audi S4 2.7T. As with any car enthusiast, there will always be more upgrades to perform, but this should act as a starting block to anyone interested in modifying the famous B5 S4. If you're looking into buying an S4, or are thinking about which mod to do next on your own S4, feel free to give us a call and pick our brain for what will suit your needs best.