Abstract. We propose an enhanced optical interferometer based on tailored non-classical light generated by nonlinear dynamics and projective measurements in a three-level atom cavity QED system. A coherent state in the cavity becomes dynamically entangled with two ground states of the atom and is transformed to a macroscopic superposition state via a projective measurement on the atom. We show that the resulting highly non-classical state can improve interferometric precision measurements well beyond the shot-noise limit once combined with a classical laser pulse at the input of a Mach-Zehnder interferometer. For a practical implementation, we identify an efficient phase shift estimation scheme based on the counting of photons at the interferometer output. Photon losses and photon-counting errors deteriorate the interferometer sensitivity, but we demonstrate that it still can be significantly better than the shot-noise limit under realistic conditions.