A storage system, coupled to an external storage system, manages a virtual volume, such as a thin provision volume. The storage system also manages a first logical device created by using storage area of internal storage devices and a second logical device created by using storage area of external storage devices in the external storage system. A storage area in the first logical device or the second logical device is allocated to the virtual volume after receiving a write request to the virtual volume. The storage system has advantage that a storage area in the first logical device and the second logical device can be managed uniformly in thin provisioning function of the storage system.