-In this paper, a high resolution capacitance sensor system was developed for two-phase flow void fraction measurements and flow pattern identification. The circuit uses the LC approach whose oscillation frequency changes as the capacitance sensor value fluctuates. This change in frequency is measured and converted in to a capacitance value. The electrodes' excitation frequency is high enough to overcome the errors involved when conductive fluids are used. A LabView program was designed to interface the circuit and to record the data collected. The capacitance sensor was built with four concave electrodes and was shielded with a copper cage. The system was tested on a vertical air-water two phase flow pipe with 1.5 inch outer diameter and 1.25 inch inner diameter.