In 1938, a motorcycle license class was created for engines up to 250cc, which made the R20 model have a short life in the BMW range. Based on the R20, BMW designed a new model to fill that niche and released the 1938 BMW R23.
The new model came with a 247cc air-cooled four-stroke single-cylinder engine and a power output of 10 hp available at 5,400 rpm, two more than the previous R20 model but not reflected in the top speed which was 95 kph (58 mph).
The chassis, with the bolted tubular steel frame and the front telescopic fork, were adopted from the R20, but the most distinguishing feature of the R23 was the toolbox which was no longer attached but embedded into the fuel tank.
The 1938 BMW R23 came with standard features such as wire-spoked wheels, a sprung seat, a suspension package with a telescopic fork in the front, a hard-tail rear unit, full-coverage fenders, and a large headlamp, wide handlebars, and a rear luggage rack.
In 1940, just after two years of production, during which 8,000 units were sold, the production of the BMW single-cylinder engines came to an end. Eight years later, in 1948, BMW resumed post-war motorcycle production and released the R24, which was based on the R23 model.