We describe a novel capacitive position sensor using micromachining to achieve high sensitivity and large range of motion. These sensors require a new theoretical framework to describe and optimize their performance. Employing a complete description of the electrical fields, the sensor should deviate from the standard geometries used for capacitive sensors. By this optimization, the sensor gains a twofold increase in sensitivity. Results on a PC board 10x model imply that the micromachined sensor should achieve a sensitivity of less than 10 nm over 500-micron range of travel. Some bioengineering applications are addressed, including positioning of micromirrors for laser surgery and dose control for implantable drug delivery systems.