A safety carpule system with integral retractable needle includes a piston element disposed between a needle hub assembly and a plunger element, each being axially slideable within a cylindrical housing. A medication-filled fluid chamber is defined between the plunger element and the piston element. The piston element is forced to into a fluid release position by way of an increase in fluid pressure within the fluid chamber, which in turn is caused by actuation of the plunger element toward the needle hub assembly by way of a syringe plunger rod. When the piston element is in fluid release position, the medication is able to flow from the fluid chamber through the needle as the syringe plunger rod is further compressed. Once the carpule system is spent, the piston element is latchably engaged by both the needle hub assembly and the plunger element, thus allowing the needle to be fully retracted into the housing upon return of the syringe plunger rod to its extended position. The spent carpule system with retracted needle is then conveniently removable from the syringe barrel for safe handling and disposal.