A self-aligning tapping tool comprises an elongate handle having a longitudinal counterbore through a first end. A tap is received in the counterbore. A collar is operatively secured to the tap. The collar is slightly smaller than the counterbore to enable slidable movement and to prevent rotation of the tap relative to the handle. A retainer is secured to the handled at the first end to retain the collar in the counterbore and has a center opening receiving the tap. A biasing spring in the counterbore biases the tap and the collar outwardly to extend the tap when the handle is turned to thread a hole in a work piece.