A tool holding system for a rotary power tool is configured to clamp around a working tool when the working tool is inserted in the tool holding system. The tool holding system includes a sleeve having a frustroconical inner surface portion, a collet having frustoconical outer surface portion complementary to the inner surface portion, a spring mount operably connected to a motor for rotation by the motor, and a spring. The spring includes a first end portion operably connected to the collet to bias the collet toward a first position whereat the outer surface portion engages the inner surface portion, and a second end portion rotationally fixed with respect to the spring mount.