The folding storm shutter provides a shutter for protecting a window during inclement weather, and shade similar to that provided by an awning when window protection is not required. The folding storm shutter has an upper shutter panel and a lower shutter panel pivotally attached to the lower edge of the upper shutter panel so that the lower shutter panel can be extended to cover the entire window, and, alternatively, the lower shutter panel can be placed in a folded configuration against the upper shutter panel when not needed for window protection. A latching mechanism is provided for selectively retaining the lower shutter panel in the folded configuration. Hinges pivotally attach the upper shutter panel to the window frame. A rod removably supported by brackets on opposite sides of the window may be used to support the shutter in the folded configuration.