This paper describes the concept of a new sleeve muscle actuator, and a transtibial prosthesis design powered by this novel actuator. Inspired by the functioning mechanism of the traditional pneumatic muscle actuator, the sleeve muscle actuator incorporates a cylindrical insert to the center of the pneumatic muscle, which eliminates the central portion of the internal volume. As a result of this change, the sleeve muscle provides multiple advantages over the traditional pneumatic muscle, including the increased force capacity over the entire range of motion, reduced energy consumption, and faster dynamic response. Furthermore, utilizing the load-bearing tube as the insert, the sleeve muscle enables an innovative "actuation-load bearing" structure, which has a potential of generating a highly compact actuation system suitable for prosthetic use. Utilizing this new actuator, the preliminary design of a transtibial prosthesis is presented, which is able to provide sufficient torque output and range of motion for a 75 Kg amputee user in level walking.