An 86 with a 4.0? Interesting as they officially came out with the 4.0 renix in 87, and 86 still used the crappy 2.8 as the 6 cylinder option. If you have a 2.8, this isn't an easy swap and you should look into a chevy 4.3 swap instead.
But if it is a 4.0....
The engine block and head will swap. You will need to remove and re-use ( or replace with new ) as needed or required from your original engine: Intake/Exhaust manifolds, throttle body, flex plate/flywheel, cylinder head, water pump, distributor-less ignition or distributor assembly, OBD engine computer sensors, fan belt driven accessories, and/or mounting brackets.
Hmmmm, you mention the head working, but then that it needs to be swapped???
So to avoid confusion, yes the head can be used, but there is a port matching issue with the renix intake and exhaust manifolds. It will kinda work, I did this years ago and didn't have major issues other than it wasn't very efficient. To do this properly you would need to either adapt the renix TB to the HO intake, or adapt the renix TPS to the HO TB. This has been done and there used to be writeups if you feel like searching a bit.
The water pump will work, you just need to trim the heater hoses to fit.
And yes, you will need the original flexplate/flywheel and CPS. Very important so don't forget to swap them while it's out.
The HO doesn't have a knock sensor, but IIRC the location is there to swap your sensor to.
The coolant sensor location is also different, but can be used with the renix sensor by relocating the wiring.
IIRC the cam position sensor is different so you should swap your distributor, but distributorless ignition doesn't come into play until the later years.
And yes, your belt driven accessories and brackets will need to be reused as this changed over the years. It's all bolt on stuff though, so no big deal.