A system and method for dynamic redistribution of parity groups is described. The system and method for dynamic redistribution of parity groups operates on a computer storage system that includes a plurality of disk drives for storing parity groups. Each parity group includes storage blocks. The storage blocks include one or more data blocks and a parity block that is associated with the data blocks. Each of the storage blocks is stored on a separate disk drive such that no two storage blocks from a given parity set reside on the same disk drive. The computer system further includes a redistribution module to dynamically redistribute parity groups by combining some parity groups to improve storage efficiency.