A storage system and a license management method that can simplify license management are proposed. In a storage system in which a first storage apparatus is connected to one or a plurality of second storage apparatuses and the first storage apparatus virtualizes each of the second storage apparatuses, the first storage apparatus checks, based on this license key, which targets the license key input from the outside for setting a predetermined optional function has been issued for, and transmits the license key to the corresponding second storage apparatus when the target to which the license key has been issued is the second storage apparatus, and the second storage apparatus sets the corresponding optional function in its own storage apparatus based on the license key transmitted from the first storage apparatus.