Quantum key distribution (QKD) offers information-theoretic security verified by quantum mechanics to share keys between legitimate users. Most of the existing QKD systems employ active decoy states based on weak coherent sources (WCS). Meanwhile, parametric down-conversion (PDC) sources are seldom used due to several of their shortcomings. In the present work, to show the superiority of PDC sources, we have accomplished a proof-of-principle demonstration of a PDC source-based QKD with over 40 dB based on the one-way BB84 protocol. In this QKD system, a novel passive decoy-state scheme-secure to coherent attacks-is proposed, using several built-in decoy states for parameter estimation. This not only avoids intensity modulating errors, but also diminishes all possible information leakage from the intensity modulating process. The experimental results show a significantly enhanced performance compared with existing PDC source-based QKD systems. In addition, it exhibits some superiority even over active decoy-state QKD systems based on WCS.