Actuators for human-interactive robot systems require transparency and guaranteed safety. An actuation system is called transparent, when it is able to generate an actuation force as desired without any actuator dynamics. The requirements for the transparent actuation include high precision and large frequency bandwidth in actuation force generation, zero mechanical impedance, and so on. In this paper, a compact rotary series elastic actuator (cRSEA) is designed considering the actuation transparency and the mechanical safety; the mechanical parameters of a cRSEA are optimally selected for the controllability, the input and output torque transmissibility, and the mechanical impedance. A mechanical clutch that automatically disengages the transmission is devised such that the human is mechanically protected from an excessive actuation torque due to any possible controller malfunction or any external impact from a collision. The proposed cRSEA with a mechanical clutch is applied to develop a wearable robot for incomplete paraplegic patients. Experimental results of a manufactured cRSEA system are introduced in this paper also.