Quantum key distribution (QKD) enables two remote parties to grow a shared key which they can use for unconditionally secure communication [1]. The applicable distance of a QKD protocol depends on the loss and the excess noise of the connecting quantum channel [2-10]. Several QKD schemes based on coherent states and continuous variable (CV) measurements are resilient to high loss in the channel, but strongly affected by small amounts of channel excess noise [2-6]. Here we propose and experimentally address a CV QKD protocol which uses fragile squeezed states combined with a large coherent modulation to greatly enhance the robustness to channel noise. As a proof of principle we experimentally demonstrate that the resulting QKD protocol can tolerate more noise than the benchmark set by the ideal CV coherent state protocol. Our scheme represents a very promising avenue for extending the distance for which secure communication is possible.