A compact brake system for a wheeled vehicle fits substantially within the profile of a tire and rim to reduce wheel box width to increase cargo space between wheel boxes. In one embodiment, a caliper bracket is mounted on a spindle lever connected to a wheel spindle, eliminating the need for a standard brake flange extending from the spindle and thereby reducing the width of the brake system. The spindle lever is mounted on a torque bar rotatably mounted on an axle to allow vertical movement of the spindle to be reacted in a dampening mechanism. A brake caliper is mounted on the caliper bracket for brakingly engaging a brake rotor. The brake caliper, caliper bracket, spindle lever and spindle are substantially or entirely disposed within the tire profile. Alternately, the brake caliper may be mounted on a drop center spindle or used with a spindle mounted on an axle.