TH-2 is China’s first short-range satellite formation system used to realize interferometric synthetic aperture radar (InSAR) technology. In order to achieve the mission goal of InSAR processing, the relative orbit must be determined with high accuracy. In this study, the precise relative orbit determination (PROD) for TH-2 based on global positioning system (GPS), second-generation BeiDou navagation satellite system (BDS2), and GPS + BDS2 observations was performed. First, the performance of onboard GPS and BDS2 measurements were assessed by analyzing the available data, code multipath errors and noise levels of carrier phase observations. The differences between the National University of Defense Technology (NDT) and the Xi’an Research Institute of Surveying and Mapping (CHS) baseline solutions exhibited an RMS of 1.48 mm outside maneuver periods. The GPS-based orbit was used as a reference orbit to evaluate the BDS2-based orbit and the GPS + BDS2-based orbit. It is the first time BDS2 has been applied to the PROD of low Earth orbit (LEO) satellite formation. The results showed that the root mean square (RMS) of difference between the PROD results using GPS and BDS2 measurements in 3D components was 2.89 mm in the Asia-Pacific region. We assigned different weights to geostationary Earth orbit (GEO) satellites to illustrate the impact of GEO satellites on PROD, and the accuracy of PROD was improved to 7.08 mm with the GEO weighting strategy. Finally, relative orbits were derived from the combined GPS and BDS2 data. When BDS2 was added on the basis of GPS, the average number of visible navigation satellites from TH-2A and TH-2B improved from 7.5 to 9.5. The RMS of the difference between the GPS + BDS2-based orbit and the GPS-based orbit was about 1.2 mm in 3D. The overlap comparison results showed that the combined orbit consistencies were below 1 mm in the radial (R), along-track (T), and cross-track (N) directions. Furthermore, when BDS2 co-worked with GPS, the average of the ambiguity dilution of precision (ADOP) reduced from 0.160 cycle to 0.153 cycle, which was about a 4.4% reduction. The experimental results indicate that millimeter-level PROD results for TH-2 satellite formation can be obtained by using onboard GPS and BDS2 observations, and multi-GNSS can further improve the accuracy and reliability of PROD.