A dose setting mechanism (4; 200) for a drug delivery device is disclosed. Themechanism comprises an outerhousing (40; 204) and an inner housing (208) having an external groove. Theinner housing guides a driver (30; 209) to dispense aset dose. A dial sleeve (10; 206) is disposed between the outer and innerhousing and is rotatably engaged with the inner housing.When a dose is set, the dial sleeve is rotated and translates away from boththe outer housing and the inner housing.