A hammer drill comprises a drive mechanism including a spindle, a first ratchet coupled for co-rotation with the spindle, a second ratchet rotationally fixed to the housing, and a hammer lockout mechanism adjustable between a first mode and a second mode. The hammer drill further comprises a clutch adjustable between a first state and a second state. The hammer drill further comprises a collar rotatably coupled to the housing and movable between a first rotational position in which the hammer lockout mechanism is in the first mode and the clutch is in the first state, a second rotational position in which the hammer lockout mechanism is in the second mode and the clutch is in the first state, and a third rotational position in which the hammer lockout mechanism is in the second mode and the clutch is in the second state.