An actuated shroud system configured to control tip clearances in a rotatable machine is provided. The system includes a rotor including a plurality of blades. Each of the plurality of blades includes a blade tip, and each blade tip includes a radially outer tip surface angled in the radial direction. The system also includes a shroud circumscribing the plurality of blades and including a radially inner surface angled complementarily to the radially outer tip surface of the blade tip. The radially inner surface and the radially outer tip surface define a tip clearance gap therebetween. The system further includes a shroud actuator operably coupled to the shroud, the shroud actuator configured to translate the shroud in at least one of an axial direction and the radial direction such that the tip clearance gap is variable based on a position of the shroud actuator.