The occurrence of steady-state squeezing in a coherently driven three-
level atom of the LAMBDA configuration is found to be highly sensitive
to the detection process of the fluorescence field. We show that ther
e is no steady-state squeezing when the two atomic transitions equally
contribute to the detected fluorescence field. There is no squeezing
even when only one of the two possible transitions contributes to the
detected fluorescence field, if the decay rate of the contributng tran
sition is smaller than or equal to the decay rate of the other transit
ion. Squeezing may occur only when the decay rate of the transition th
at exclusively contributes to the detected fluorescence field is large
r than the decay rate of the other transition. Moreover, when the sque
ezing attains its maximum value, pure two-level squeezing is involved.
The system reduces to a two-level system in which both the basic thre
e-level dynamics and the the two-photon coherences are destroyed.