The Accelerator Test Facility 2 (ATF2) is a scaled demonstrator system for final focus beam lines of linear high energy colliders. This paper describes the high resolution cavity beam position monitor (BPM) system, which is a part of the ATF2 diagnostics. Two types of cavity BPMs are used, C-band operating at 6.423 GHz, and S-band at 2.888 GHz with an increased beam aperture. The cavities, electronics, and digital processing are described. The resolution of the C-band system with attenuators was determined to be approximately 250 nm and 1 m for the S-band system. Without attenuation the best recorded C-band cavity resolution was 27 nm.