Capacitance transducers are used in different applications such as measurement of vibrations, displacement, pressure, fluid density and so on. Depending on the application, transducers can have both floating electrodes, or in some cases, one earthed. Mean capacitance values range from a few picofarads up to hundreds of picofarads, while the resolution required is often of the order of a few tens of parts per million of the mean value. Shielding techniques introduce parasitic capacitances, the compensation of which requires methods ranging from measuring configurations for floating capacitances up to more complicated techniques when one of the two transducer electrodes is earthed. This paper presents an instrument employing an auto-balancing technique via a negative feedback that zeroes the static value and the very slow fluctuations of both the transducer and the stray capacitances, allowing high signal amplification and thus high sensitivity. The measuring circuit is composed essentially of a phase-sensitive detector and an integrating feedback path. A sensitivity of 1 mV fF-1 and a measurement range up to 10 pF is obtained, while an equivalent capacitance noise of 0.5 fF has been measured in the presence of a three-decade bandwidth.