A rotary tapered tool holder includes a shank including a front mounting portion and an aperture. An expansion sleeve is disposed about a portion of the shank. The expansion sleeve includes a front mounting portion adjacent the front mounting portion of the shank. An expansion rod is disposed within the shank and includes a pocket or cam surface. An expansion pin is at least partially received in the aperture of the shank. The expansion pin has a first end or cam surface for engaging the pocket of the expansion rod, and a second end for engaging the front mounting portion of the expansion sleeve. A force applied to the expansion rod in a first direction causes the expansion pin to move in a second direction and into positive engagement with the front mounting portion of the expansion sleeve, thereby forcing the expansion sleeve into positive contact with a tapered bore of a spindle of the tool holder.