The execution unit contains.

• the register set of 8086 except segment registers and IP.
• a 16-bit ALU to perform arithmetic & logic operation
• 16-bit flag register reflects the results of execution by the ALU.
• the decoding units decodes the op-code bytes issued from the instruction byte queue.
• the timing and control unit generates the necessary control signals to execute the instruction op-code received from the queue.

The execution unit may pass the results to the bus interface unit for storing them in memory.