Methods and systems for two device failure tolerance in a RAID 5 storage system. Features and aspects hereof provide for allocating a spare storage device in the storage system for use with a standard RAID level 5 storage volume to form an enhanced RAID level 5 volume. Additional redundancy information is generated and stored on the spare storage device such that the enhanced RAID level 5 volume is operated by the storage controller so as to survive a failure of up to two of the storage devices of the enhanced volume. The allocated spare storage device may be reallocated by the storage controller for another purpose in which case the storage controller continues to operate the enhanced volume as a standard RAID level 5 volume that can only tolerate a single failure of a storage device of the volume.