The paper introduces a novel transducer technology, called the solid-state micro-hydraulic transducer, currently under development at MIT. The new technology is enabled through integration of micromachining technology, piezoelectrics, and microhydraulic concepts. These micro-hydraulic transducers are capable of bi-directional electromechanical energy conversion, i.e., they can operate as both an actuator that supplies high mechanical force in response to electrical input and an energy generator that transduces electrical energy from mechanical energy in the environment. These transducers are capable of transducing energy at very high specific power output in the order of 1 kW/kg, and thus, they have the potential to enable many novel applications. The concept, the design, and the potential applications of the transducers are presented. Present efforts towards the development of these transducers, and the challenges involved therein, are also discussed.