The invention is a system and method for propellantless, ultrahigh precision satellite formation flying based on ultrahigh precision intracavity laser thrusters and tethers with an intersatellite distance accuracy of nanometers at maximum estimated distances of tens of kilometers. The repelling force of the intracavity laser thruster and the attracting force of tether tension between satellites form the basic forces to stabilize matrix structures of satellites. Users of the present invention can also use the laser thruster for ultrahigh precision laser interferometric metrology, resulting in simplification and payload weight reduction in integrating the thruster system and the metrology system.