A mode selector mechanism is provided for a rotary power tool for selecting between an impact mode and a drill mode. The power tool includes a housing, a motor oriented in the housing, an input shaft and an output shaft both rotationally mounted in the housing. An impact mechanism connects the input shaft to the output shaft for imparting a rotary impact to the output shaft when the torque load exceeds a predetermined torque capacity of the impact mechanism. A stopping member is shiftable by a user between a first orientation that permits the impact mechanism to operate in the impact mode and a second orientation that prevents a coupler of the impact mechanism from retracting, thus maintaining the connection of the input shaft and the output shaft in the drill mode.