A tool storage system stores tool holders for use in machine tools. The tool holders hold tools such as milling cutters, taps, drills, reamers, chamfering or deburring tools or the like. The tool holders may have standard taper-shanks. A receptacle is provided for each tool holder. The receptacles are arranged on a generally vertical array and hold the tool holders generally horizontally. The tool holders may be retained by engagement of a pull stud in the receptacle. The generally vertical array arrangement permits storing a large number of tools in a small footprint. In embodiments, a computer system provides functions for managing the tools and/or jobs in which the tools are used.