The performance of micro-machined sensors is primarily determined via the sensitivity of sensing electrode to displacement. This paper presents the design, modelling, optimization and fabrication of an active gap reduction mechanism used on a conventional comb drive to enhance the capacitance in a three axes capacitive micro accelerometer. The design parameters of the active gap reduced comb drive (AGRCD) are optimized for best performance. The finite element analysis of the AGRCD is performed for design verification. The modeling and simulation results demonstrated a 534 % increase in sensitivity of the three axes capacitive micro accelerometer. The three axes capacitive micro accelerometer with AGRCD is fabricated using a commercially available standard metal-multi user MEMS processes.