A reciprocating saw includes a housing, a motor, and a drive mechanism. The motor includes an output gear rotatable about a motor axis. The drive mechanism includes a driven gear that engages the output gear and is rotated by the motor. The driven gear has a circumference and is vertically-oriented within the housing. The drive mechanism also includes an output shaft coupled to the driven gear and configured to reciprocate relative to the housing. The drive mechanism further includes a single counterweight fixed relative to the driven gear and rotating with the driven gear through a path and in a same direction. As the counterweight moves through a rearward half of the path, the counterweight generally moves in an upward direction, and as the counterweight moves through a forward half of the path, the counterweight generally moves in a downward direction.