An e- beam size monitor, called the “Shintake Monitor” (or “IPBSM”), is installed at ATF2’s virtual interaction point (“IP”). It plays a crucial role in achieving ATF2’s Goal 1 of focusing the vertical e- beam size (σy*) down to a design value of 37 nm, using an ingenious technique of colliding the e- beam against a target of laser interference fringes. σy* is derived from the modulation depth of the resulting Compton signal photons measured by a downstream γ detector. IPBSM is the only existing device capable of measuring σy* as small as 20 nm with better than 10% resolution, and can accommodate a wide range of σy* up to a few μm by switching between laser crossing angles θ = 174°, 30°, and 2° - 8° according to beam tuning status. The effects of several major hardware upgrades have been confirmed during beam time, such as through suppressed signal jitters, improved resolution and stable measurements of σy* down to about 150 nm by Feb 2012. The aims of the extensive 2012 summer reform implemented upon the laser optics are higher reliability and reproducibility in alignment. Our goal for the autumn 2012 run is to stably measure σy* < 50 nm. This paper describes the system’s design, role in beam tuning, and various efforts to further improve its performance.