Purpose 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. Design/methodology/approach The mechanical parameters of a cRSEA are optimally selected for the controllability, the input and output torque transmissibility and the mechanical impedance by simulation study. 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. To verify torque tracking performance and disengagement of the mechanical clutch, experiments were conducted. Findings As the effects of the gear ratio, N1, on the four control performance indexes are conflicting, it should be carefully selected such that the controllability and the output torque transmissibility are maximized, while the disturbance torque transmissibility and the mechanical impedance are minimized. When the four control performance indexes were equally weighted, N1 was selected as 30. Experimental results showed that the designed cRSEA provided good control performances and the mechanical clutch worked properly. Originality/value It is important to design the actuator so as to maximize the control performance in accordance with its purpose. This paper presents the design guidelines for the SEA by introducing four control performance indexes and analyzing how the performance indexes vary according to the change of design parameter. From the viewpoint of practicality, a mechanical clutch design method that prevents excessive torque from being transmitted to the wearer and an analysis to solve the locking phenomenon when using a worm gear are presented, and a design method of SEA satisfying both control performance and practicality is presented.