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E30 only.
It was essentially the same engine that was in the first (e30) M3 but was produced for the Italian market to meet a lower tax threshold on cars that were under 2-litres. It's basically just a shorter stroke S14 motor.
The next generation M3 went to the S50 6 cylinder lump whilst the same S42 engine from the E30 carried over into the 4 cylinder E36's.
The M42 engine in the 318iS was the basis for the S42 engine that was used in the Tourenwagen series in Germany.
The 320iS produced for the Italian market used a derivative of the S14 lump from the E30 M3.