A rotary hammer includes a housing, a first motor supported by the housing and defining a first motor axis, a second motor supported by the housing and defining a second motor axis that is coaxial with the first motor axis, and a spindle coupled to the first motor for receiving torque from the first motor, causing the spindle to rotate. The rotary hammer further includes a reciprocation mechanism operable to create a variable pressure air spring within the spindle. The reciprocation mechanism includes a piston configured to reciprocate within the spindle in response to receiving torque from the second motor, a striker that is selectively reciprocable within the spindle in response to reciprocation of the piston, and an anvil that is impacted by the striker when the striker reciprocates towards the tool bit. The anvil imparts axial impacts to the tool bit.