A transmission housing for a hammer drill comprises two clamshell halves and that mate to define a first transmission housing chamber and a second transmission housing chamber disposed on either side of a ball bearing race. The first and second transmission housing chambers are interconnected by channels. The rear end of a hollow piston, a cylindrical bearing, a crank pin and a crank plate are disposed in the first transmission housing chamber, and a spindle is disposed in the second transmission housing chamber. Overflow channels and allow movement of air between the first and second transmission housing chambers to reduce compression of air iduring reciprocation of the hollow piston.