Preheat oven to 350 degrees F (175 degrees C). Grease and flour an 8 inch square pan.
In a medium bowl, cream together the butter and sugar until light and fluffy. Beat in the eggs, one at a time, then stir in the vanilla. Combine the flour and baking powder, add to the creamed mixture and mix well. Finally stir in the milk, key lime juice and lime zest.
Pour batter into prepared pan. Bake for 25 to 30 minutes in the preheated oven. Cake is done when it springs back to the touch. Allow to cool in pan for 10 minutes, then turn out onto a wire rack and cool completely.
Dust with confectioners' sugar before serving.
Interesting Facts
Key limes are smaller, more tart, and more aromatic than regular limes.
Key limes have a higher acidity than regular limes which helps to give this cake a unique flavor.
This cake is a great way to use up any extra key limes you have on hand!