We demonstrate a robust, compact and automated quantum key distribution system, based upon a one-way Mach-Zender interferometer, which is actively compensated for temporal drifts in the photon phase and polarization. The system gives a superior performance to passive compensation schemes with an average quantum bit error rate of 0.87% and a duty cycle of 99.6% for a continuous quantum key distribution session of 19 hours over a 20.3km installed telecom fibre. The results suggest that actively compensated QKD systems are suitable for practical applications.