Distillation of the two-mode squeezed state.

We experimentally demonstrate entanglement distillation of the two-mode squeezed state obtained by parametric down-conversion. Applying the photon annihilation operator to both modes, we raise the fraction of the photon-pair component in the state, resulting in the increase of both squeezing and entanglement by about 50%. Because of the low amount of initial squeezing, the distilled state does not experience significant loss of Gaussian character.