Fuel efficient cherokee

I am redoing a 1983 Jeep Cherokee to use as a daily driver.  I like the body style and the idea of driving something other than the run of the mill SUV.  I will only be using the 4 wheel drive for possible snow and off-roading when I’m tracking down fishing spots.  My main goal over all is the fuel economy and not the off-roading.  I have 3.07 gears, both front and rear in Dana 44’s.  I want to replace my engine transmission and transfer case with a Chevy setup out of a newer model 4x4 for the better fuel economy.  I know that I want ether a 5.7 or 5.3 V8 with a 6 speed automatic transmission (6L80).  I hope to be able to use readily available modern programmers to help get the best MPG possible. Here are my questions.

1. Should I put lower gears in the front for better traction?
2. Would that affect the MPG or not since it spins free unless engaged?
3. Is there a better setup for MPG then the V8 and 6 speed auto?
4. V6 uses less gas but would it be a dog with the Jeep at 5000lb?

I know these aren’t you normal “How can I make it bigger and badder” questions, but I have muscle cars for that.  This is just a cruiser with 4 wheel drive.  

3.07 gears were a good match for fuel economy without an overdrive tranny. But, with an overdrive tranny, would be way too high. The gears would need to be matched with your tire size for the best fuel economy. For 31" tires and an overdrive tranny, you'd want 4.10's. Also, the front and rear ratios need to match.

The GM powertrains are matched, engine and tranny. You would want to get a complete engine and tranny combo, including the computer and the wiring harness. The 5.7 never had a 6spd auto and the 5.3 did not until 2008, making that a very new and expensive drivetrain.

I had a 2004 Escalade with the 6.0L and 4spd auto. I currently have a 2007 Escalade with the 6.2L and 6sp auto. Believe it or not, I actually liked the 2004 engine tranny combo better. The 2007 6.2L is a high rpm motor, that once it gets going is pretty fun. But, for normal everyday driving, it's actually kind of a dud on the bottom end. The 2004 was not a dud and pulled my boat much better.

There is a lot of drag that has to be accounted for with regard to fuel economy and the specific vehicle. You'll not get the same fuel economy with an FSJ Cherokee as the newer GM platforms. My 2004 Escalade got 14-15 around town, and 16 on the hi-way. My 2007 gets about the same around town, but about 18 on the hi-way. You'll probably suffer a couple mpg just because of the aerodynamic differences.

A heavy Jeep TJ with a 2.5L 4cyl gets worse fuel economy than a heavy TJ and the 4.0L 6cyl. And there are plenty who have swapped in a 5.3L GM V8 and report getting the same or even better fuel economy than the 6cyl. An under-powered motor will never get as good of fuel economy as a larger engine running at its peak efficiency RPM. A smaller engine is not always going to deliver better fuel economy, contrary to what many people believe.

A GM 5.3L with a 4spd auto would make a great swap and get great fuel economy compared to the AMC offerings. The 5.3's are plentyful and cheap. But, they will not be anything to brag about in the performance department. A 6.0L and 4spd from a 2001-2006 Denali or Escalade will deliver about the same fuel economy, but have a much better low end. But, the Escalade motor will have a premium price compared to the 5.3's.  

Wow you are the Guru.  Thanks for the information. That helps a lot.  I knew that the 6 speed was new and would probably cost more but didn’t know if it would be the best.  I am hoping to find a hell of a deal in one of the local salvage yards and on line auto recyclers.  I will also start looking in to the 6.0L I guess I was one of the people that thought it would have bad gas mileage.  Thank for taking the time to pass on the information it’s a big help.