A storage system comprises a plurality of storage devices, with the storage devices comprising a first set of storage devices each having a first capacity and a second set of storage devices each having a second capacity higher than the first capacity. The storage system is further configured to establish an extended redundant array of independent disks (RAID) group to extend existing RAID stripes of the storage devices of the first set into the storage devices of the second set, and to establish an additional RAID group for the storage devices of the second set, the additional RAID group comprising one or more additional RAID stripes for the storage devices of the second set. The storage devices of the second set are illustratively added to the storage system to expand its capacity beyond that provided by the storage devices of the first set. Other embodiments include methods and computer program products.