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Key Colony Beach is a municipality in the middle of the Florida Keys, Monroe County, Florida, United States. The population was 790 at the 2020 census. Before the early 1950s, Shelter Key was a 97-acre low-lying island. Then, Phil Sadowski began dredging around the island, adding to its size and increasing its height to 6 feet above mean sea level, and later built developments on the island.