byRandy Walters

 Crack the lugbolts loose, jack the car up, and remove the wheel. 
Remove the center dust cap, cut the folded tab off the axle's collar nut with a small chisel (don't try to pry it up cause you'll just break your screwdriver), then detach the caliper and hang it with some wire, remove the brake pads, the pad carrier, and remove the rotor. 

Spray the stub axle and inner race with Rost Off (or Liquid Wrench) and let it soak for several minutes. Repeat once or twice. 

Re-install the wheel and snug the lugbolts slightly more than finger tight but don't crank em down. You'll need to be able to loosen/remove the lugs while the car is off the ground later.

 Lower the car to the ground so it's full weight is on the wheels, and set the parking brake firmly. Break the collar nut loose with a 36mm socket wrench and a cheater pipe. For this i use a 3/4" drive slide-bar with a 3ft section of pipe, a 3/4-to-1/2 drive adapter, and my 20 year old 36mm socket from my old Beetle days.

 Raise the car again but this time put a floorjack under it cause now yer gonna remove the old wheelbearing/hub assembly. Leave the wheel on the car for now, and remember the lugs are to be finger-tight.

 With the wheel still mounted to the hub, further loosen the collar nut so it's about a 1/4" away from the bearing's inner race, but don't remove it at this point. Then just simply yank on the tire a few times (kinda like a slide-hammer effect) and the bearing should pop loose from the stub axle and slam up against the loosened nut. The nut prevents the wheel from coming completely off and slamming into your face. Once the bearing has broken loose from the stub axle, remove the nut and give it another gentle yank and it should come all the way off. If you're lucky it won't leave the inner race stuck to the stub axle as they are known to do. The Rost-Off/Liquid wrench soak trick will increase your chances of the race coming off with the bearing assembly. Thoroughly clean the now exposed stub axle. 

The bearing's inner race is actually split into two sections so be careful when handling the new bearing that you don't allow the outer race to come out of the hub (it's held in place by a temporary nylon sleeve to keep the two sections together in the box). If it does fall out like i stupidly allowed mine to, it's kinda hard to knock it back in because it has to sorta snap past the ball bearings inside. After a lot of fiddling i was able to knock the outside race back into place against the inside one. Do not attempt to install the bearing unless the outer race is in it's proper place against the inner race section, it looks like it will damage the ballbearing cage if forced while it's in place on the stub axle. 

When installing the new bearing, carefully hold it squarely against the end of the stub axle then *gently* tap it on using the 36mm socket and a short extension as a drift *against the inner race*. You have to push against the inner race and not any other part of the bearing or assembly, *Only the inner race*. Once it gets started onto the stub axle, thread the new nut on and simply tighten it down which pushes the wheelbearing fully on until it stops. Don't force it.

 Re-install the brakes and wheel, lower the car back onto it's wheels then torque the nut down to about 200 ft lbs. Jack it back up again and remove the wheel again so you can gain access to the center nut area. Bend the locking tab down to secure the nut, install the new dust cap, then put the wheel back on for the final time. 

The Bentley Manual and Factory Manual says you have to use special tools but these bearings apparently aren't pressed on all that tight. Now if the inner race stays stuck to the stub axle then it will be a bit of a pain to cut or pull off. Mine came off with the bearing so i didn't have to deal with this. If it had stayed on the axle, i think i could have cut into the race with my Dremel Tool and a carbide cutting wheel, then smack the cut with a small chisel to crack the race, relieving the pressure so it can slide off. 

The brake backing plate may get in the way of using a puller to get a stuck inner race off so that might be a bit of a problem if this happens. You may be able to carefully bend the backing plate aside/away enough to get the puller's claws behind the race but i just don't know for sure as my race came off with the wheelbearing assembly. If you soak it with penetrant like i said above you can reduce the chance of the race getting stuck. I think heat applied to the axle and bearing before yanking the assembly off would loosen the tolerances too. 

And if for any reason you remove the backing plate and/or the little protective collar, remember to re-install it *before* installing the new bearing assembly, or you'll have to remove (and destroy) that new bearing you just installed a minute ago. That would suck.

 Double-check your work as you progress - there's a lot of redundant steps but you don't want to leave any out :-)

 Good luck,

Randy Walters
89 325is 

Bearing/Hub assembly w/ABS # 31 21 1 131 297

 Collar Nut # 31 21 1 125 826

 Dust Cap # 31 21 1 130 125