Abstract: A reciprocating saw includes a housing assembly, a motor, and a drive mechanism. The drive mechanism includes a gear coupled to and driven by a pinion of the motor for rotation about a first axis. The gear is vertically-oriented within the housing assembly and has an outer periphery. The drive mechanism also includes a spindle reciprocatable relative to the housing assembly, a connecting rod having a first end coupled to the gear and a second end coupled to the spindle to transmit rotation of the gear into reciprocation of the spindle, and a counterweight rotatably coupled to the housing assembly for rotation about the first axis within the outer periphery of the gear. The counterweight is also coupled to the first end of the connecting rod such that the counterweight is moved in a substantially opposite direction than the spindle to counterbalance reciprocation of the spindle.