We investigate theoretically the temporal evolution of a squeezed state in lossy coupled-cavity systems. We present a general formalism based upon the tight-binding approximation and apply this to a two-cavity system as well as to a coupled-resonator optical waveguide in a photonic crystal. We derive analytical expressions for the number of photons and the quadrature noise in each cavity as a function of time when the initial excited state is a squeezed state in one of the cavities. We also analytically evaluate the time-dependent cross correlation between the photons in different cavities to evaluate the degree of quantum entanglement. We demonstrate that loss in such coupled-cavity systems cannot be treated using simple exponential factors. Finally, we also derive approximate analytic expressions for the maximum photon number, maximum squeezing, and maximum entanglement for cavities far from the initially excited cavity in a lossless coupled-resonator optical waveguide. (Read More)