Powered exoskeletons need actuators that are lightweight, compact, and efficient while allowing for accurate torque control. To satisfy these requirements, researchers have proposed using series elastic actuators (SEAs). SEAs use a spring in series with rotary or linear actuators. The spring compliance, in conjunction with an appropriate control scheme, improves torque control, efficiency, output impedance, and disturbance rejection. However, springs add weight to the actuator and complexity to the control, which may have negative effects on the performance of the powered exoskeleton. Therefore, there is an unmet need for new SEA designs that are lighter and more efficient than available systems, as well as for control strategies that push the performance of SEA-based exoskeletons without requiring complex modeling and tuning. This article presents the design, development, and testing of a novel SEA with high force density for powered exoskeletons, as well as the use of a two degree-of-freedom (2DOF) PID system to improve output impedance and disturbance rejection. Benchtop testing results show reduced output impedance and damping values when using a 2DOF PID controller as compared to a 1DOF PID controller. Human experiments with three able-bodied subjects (N = 3) show improved torque tracking with reduced root-mean-square error by 45.2% and reduced peak error by 49.8% when using a 2DOF PID controller. Furthermore, EMG data shows a reduction in peak EMG value when using the exoskeleton in assistive mode compared to the exoskeleton operating in transparent mode.