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Yes it will. Just did the exact same swap - 89 Wrangler to a 98 Cherokee (MT).

Remember to use the flywheel from the '98.

You will have to swap parts like distributor, oil pressure - thingy, crankchaft pully etc. - it's an easy job it all bolts right on. Manifolds/fuel injection also bolts right on.

You will also have to rearrange the placement of the ignition coil from the engine block to the body/frame. (took 5 min on the Cherokee)

/Jakob

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Q: Will an engine from a 89 jeep wrangler fit in a 98 wrangler?
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