In this paper we present an investigation of the main non-idealities and error sources in precision capacitive displacement sensors. The sources of errors are described quantitatively and a compensation technique is proposed. The linearity of a capacitive sensor with self-alignment feature is tested with an optical Fabry-Perot displacement Interferometer. Experimental data from the practical implementation of the compensation is presented. Two different models for guard ring gap correction are compared and verified with the experimental data. Accuracy of better than 2 nm is achieved for displacement range of 15 μm, using only two calibration points.@en