The World Group was the highest level of Davis Cup competition in 1986.

[1] Australia won the title, defeating the two-time defending champions Sweden in the final, 3–2.

The final was held at the Kooyong Stadium in Melbourne, Australia, from 26 to 28 December.

The first-round losers played in the Relegation Play-offs.

The winners of the play-offs advanced to the 1987 Davis Cup World Group, and the losers were relegated to their respective Zonal Regions.