We investigate a single atom cavity-QED system directly driven by a broadband squeezed light. We demonstrate how the squeezed radiation can be used to sense the presence of a single atom in a cavity. This happens by transferring one of the photons from the field in a state with an even number of photons to the atom and thereby populating an odd number of Fock states. Specifically, the presence of the atom is sensed by remarkable changing in the presence of one photon and the loss of squeezing of the cavity field. A complete study of quantum fluctuations and the excitation of multiphoton transitions is given.