The 8086 microprocessor is a 16-bit processor released by Intel in 1978. It has approximately 29,000 transistors and a 40-pin DIP package. The 8086 uses 20-bit addresses, allowing it to access up to 1 megabyte of memory space. It is divided into two main units - the Bus Interface Unit which fetches instructions and data from memory, and the Execution Unit which decodes and executes the instructions. The 8086 has 4 segment registers (CS, DS, SS, ES), 7 general purpose 16-bit registers (AX, BX, CX, DX, SP, BP, SI, DI), an instruction pointer register, and a flag register.