The invention is a rotary drive system for a jack hammer which incorporates a plurality of annular sleeves to transfer the motion generated by the piston to the tool holder and thereby allows the piston to strike the tool when the piston moves in the forward direction. Upon the return stroke of the piston, the annular sleeves are provided with mutually engaging helical splined teeth which causes a partial rotation of the tool holder and thereby provides rotation of the tool holder prior to the piston's next impact with the tool. All of the components are annular and, therefore, easily assembled into the bore of the jack hammer housing. Also, the use of helical splines significantly reduces the frictional resistance of the complete system.