I just inherited a 1986 ranger 2..9l 4x4, this engine has lived a rough life. I'm tossing around the idea of swapping with a 4.0. now before I get told about doing a V8, I don't have the $$ for all the parts I'd need as I have a Jeep that I need to buy a tranny and transfer case for.my stepson gave me this truck because I was rebuilding the 4.0l.

 

Welcome to the forum

The 2.9l and 4.0l OHV(1990-2000) used the same block, so the motor mounts and transmission bellhousings are the same

You will need a 1990-1994 4.0l computer and engine wiring harness with MAF sensor and EDIS-6 spark module included(1995-2000 added 40 more wires, can be done but more work)
Computer needs to match auto or manual trans, but 1986 A4LD auto will be an issue, as it was 1 solenoid and 4.0l only used 2 solenoid A4LDs
Manual would be no problem

2.9l exhaust system can work but you need to have an O2 sensor on each bank/side of the engine, 2.9l just has the one where "Y" pipes meet
You can buy clamp on O2 bungs and just seal up the current hole