A downhole hydraulically powered tool (10) moves an expander (36) in a well to radially expand a downhole tubular. The tool includes a plurality of fluid-powered pistons (16, 20) for axially stroking the expander relative to a tool mandrel (12), and one or more slips (52) for axially securing the tool in the well. The tool mandrel is rotatably secured to the tubular to rotate with the tubular, thereby rotating a bit (60) at the lower end of the tubular. The expander is moved axially downward in response to axial movement of the pistons to radially expand the tubular after at least a portion of the well is drilled with the bit and while the slips secure the tool in the well.