The Audi 80 (B3) obtained a major facelift for the 1992 model year in 1991. It was from then on known internally as the B4 (or Typ 8C). Changes from the B3 included a longer wheelbase, a fully redesigned fuel tank and rear axle to enable the use of folding seats, 15" roadwheels with more prominent wheel arches, redesigned and painted rear and front bumpers, as well as higher-quality materials for the interior. The front grille was merged with the bonnet and given a bolder look.

The B4 also marked the beginning of Audi's move into the German luxury mid-sized vehicle segment, which until then was clearly dominated by Mercedes-Benz and BMW. On the European market, and in Germany in particular, the B4 and its variants were highly successful and popular.

In Europe, the 90 name was discontinued, and all saloons were badged as 80, regardless of which engine they had. Audi of America went the opposite direction, and began selling the saloon as the 90. B4s for the American market typically offered more luxury even in the standard version, such as automatic transmission, cruise control, air conditioning and leather seats, all of which were usually optional at additional cost (or standard) on European models.

Because the United States does not recognise the international ECE Regulations on auto safety components and constructions, but rather maintains its own Federal Motor Vehicle Safety Standards, the front of the B4 had to be specially redesigned for vehicles sold in North America. The front and bumper had to be designed to accommodate impact energy absorbers not required outside North America. Instead of the dual-reflector headlamps, a single-reflector design was used inboard of an amber combination turn signal, parking, and side marker lamp and reflector wrapping around the corner, and fog lamps smaller than the rest-of-world items were placed the corners of the bumper air duct.

European market cars were now available with a selection of inline four-cylinder engines, as well as the familiar in-line five, and two different new V6 engines (2.6 and 2.8); the later 2.8 V6 was the only engine available for vehicles sold in North America. As another first, Audi introduced a new high-torque, direct-injection, turbocharged diesel engine, the 66 kilowatts (90 PS; 89 bhp) 1.9 TDI (Turbocharged Direct Injection). The standard 1.8-litre petrol engine of the B3 was discontinued; a two-litre, 66 kW (90 PS; 89 bhp), 4-cylinder petrol engine, a variation of the previously known 85 kW (116 PS; 114 bhp) 2.0 E engine, was now available for the base model.