This paper describes, with reference to related studies, a human-oriented design approach to developing a safe robot system for human-robot coexistence. First, a soft covering made of a visco-elastic material is designed to achieve both effective impact force attenuation and high contact sensitivity within a human pain tolerance limit. Second, a fail-safe robot system is constructed with contact sensing and subsequent emergency stop control capabilities, primarily by using a simple disturbance observer which plays an important role of checking the normal operation of a two-link DD-motor-driven manipulator. Actual human-robot collision experiments verified that the contact forces generated at the collisions were suppressed below the human pain tolerance limit. Moreover, an additional robot speed reduction mechanism was provided to show that the human reflexive motions to avoid a severe contact with the robot within a safeguarding space contribute to enhancing the efficiency of the system to the point of reducing the speed of the robot in a safe manner when the robot comes in contact with the human.