This paper proposes an electro-hydraulic actuator (EHA) system, and a novel-designed electro-hydraulic unit (EHU) consisting of a fixed-displacement hydraulic gear machine and a variable-speed electric machine. The novel EHU design integrates an electric machine and a hydraulic machine in a single housing, targeting optimal compactness, power density, and component reduction. The EHA system features an open circuit design, where hydraulic hoses connect the EHU with a tank, a valve manifold, and the hydraulic cylinder. In this way, the proposed EHA technology can be used to implement distributed hydraulic actuation in a vehicle without requiring changes to the hydraulic actuators or at the overall layout of the hydraulic components with respect to the original vehicle design. A dedicated test rig is developed to verify the performance of the proposed EHA system. The efficiency of the EHA is measured in a steady state and under a realistic duty cycle of a commercial compact loader. The efficiency of the EHA system based on the measurements on the test rig can reach 54% with up to 20 kN load and 6 kW power level. Furthermore, the EHU is implemented on the reference machine to drive the boom function. Preliminary results on the performance of the EHU show an efficiency of up to 68% under different loading conditions.