In this study, we are presenting design considerations for the development of a LED bi-function headlight module to replace conventional HID projector modules for retrofitting or OE installation purposes. The objective was to develop a projector-type module to outperform current 35W HID light sources in both low-beam and high-beam, but with far less installation space. Essential features like multichip SMT LED usage and the optical system design will be described in detail. Special care was taken for the heat management of the high power LEDs, with optimization of the heat dissipation thermal path via PCB, heatsink and active cooling by extensive CFD simulation work. The achieved lumen output of greater 1400lm in LB and greater 2000lm in HB enables a projector module of very compact size (<1,200 cm3) to easily replace HID modules.