Abstract We propose the Gaussian continuous-variable quantum key distribution using squeezed states in the composite channels including atmospheric propagation with transmittance fluctuations. We show that adjustments of signal modulation and use of optimal feasible squeezing can be sufficient to significantly overcome the coherent-state protocol and drastically improve the performance of quantum key distribution in atmospheric channels, also in the presence of additional attenuating and noisy channels. Furthermore, we consider examples of atmospheric links of different lengths, and show that optimization of both squeezing and modulation is crucial for reduction of protocol downtime and increase of secure atmospheric channel distance. Our results demonstrate unexpected advantage of fragile squeezed states of light in the free-space quantum key distribution applicable in daylight and stable against atmospheric turbulence.