The Audi B7 platform Audi S4 quattro, based on the Audi B7 A4, debuted in late 2004. Although Audi classifies it as a new car, the differences between it and the outgoing B6 S4 casually appear to be primarily cosmetic, and is still classified by the internal designation: Typ 8E (although with revised sub-designations - saloon: 8EC, Avant: 8ED, and Cabriolet: 8HE).It has the same 4.2 litre V8 engine (identification code: BBK) as the B6 S4, producing a power output of 253 kilowatts (344 PS; 339 bhp) at 7,000 revolutions per minute (rpm), and 410 newton metres (302 lbf·ft) torque at 3,500 rpm.

There are a few mechanical changes, such as revised springs and dampers and, from model year 2007, an updated Torsen T-3 automatically biasing centre differential, featuring a 'default' asymmetric 40:60 front-rear torque split on manual transmission models, along with the later Bosch ESP 8.0 Electronic Stability Programme and gloss black painted brake calipers.The 'Avus-III' roadwheels now became an option, and were replaced by a standard offering 8.0Jx18 inch 'S-design' 7-spoke forged alloy wheel.

Bose sound system is now standard, whereas it was optional on the B6 S4, and an enhanced optional DVD-ROM-based RNS-E satellite navigation system replaces the previous CD-ROM-based RNS-D option.

The new trapezoidal single-frame grille, Bi-Xenon high-intensity discharge lamp (HID) headlamps, L-shaped tail-lamps, quad exhaust tail pipes, and discrete V8 badging below the side repeater indicators help distinguish the B7 from the previous B6 model.