A vibration reduction and lubricating mechanism for a powered hammer includes a power driven piston in a cylinder that reciprocatingly drives a ram, which repetitively strikes a beat piece, which repetitively strikes a tool received in a tool holder. The vibration reduction and lubricating mechanism includes a first chamber defined in a housing of the powered hammer. A second chamber is defined within an end portion of the cylinder facing the beat piece, forward of the ram. A passageway is in communication with the first and second chambers. A counter mass is mounted for oscillating movement within the first chamber. When the hammer is operated, the counter mass is caused to oscillate to counteract vibration in the housing and to cause lubrication fluid to move between the first and second chambers.