Through systematic increases of computing power, 4-dimensional variational assimilation (4D-Var) became feasible and part of ECMWF operations since 1997, paving the way to base ERA-Interim on 4D-Var (rather than 3D-Var as in ERA-40).
Enhanced computing power also allowed horizontal resolution to be increased from T159 (N80) to T255 (N128), and the latest cycle of the atmospheric model (IFS CY31r1 and CY31r2) to be used, taking advantage of improved model physics.
ERA-interim retains the same 60 model levels used for ERA-40 with the highest level being 0.1 hectopascal.
In addition, data assimilation of ERA-Interim also benefits from quality control that draws on experience from ERA-40, variational bias correction of satellite radiance data, and more extensive use of radiances with an improved fast radiative transfer model.
See ECMWF publication on ERA-40 for further details. An open-access journal article describing the ERA-Interim reanalysis is available from the Quarterly Journal of the Royal Meteorological Society
