Exoskeletons are increasingly interesting for human assistance applications ranging from rehabilitation to force enhancement. However, today's exoskeletons are relatively slow and lack the mechanical transparency required to complete several daily tasks, mainly due to their bulky and non-back-drivable actuation mechanisms. To improve upon conventional exoskeleton designs, this letter presents a novel power-distribution system that combines magnetorheological (MR) clutches and low-friction hydrostatic transmissions using rolling diaphragms. In such a system, MR clutches are used to rapidly modulate the torque provided from a centralized power source and distribute it to each joint through a high-bandwidth, back-drivable, and low-inertia transmission. The main objective of this letter is to investigate the transparency performance of the MR-hydrostatic power distribution in terms of its force-bandwidth and back-drivability with the aim of being used in future exoskeletons. Experiments with a custom one degree-of-freedom haptic joint are supported by an analytical model that demonstrates the high bandwidth (>40 Hz) and good backdrivability (2–11% of peak force) of an MR-hydrostatic system.