A network storage server implements a method to maintain a parity declustered RAID organization with distributed hot sparing. The parity declustered RAID organization, which provides data redundancy for a network storage system, is configured as a RAID organization with a plurality of logical drives. The RAID organization is then distributed in a parity declustered fashion to a plurality of physical drives in the network storage system. The RAID organization also has a spare space pre-allocating on each of the plurality of physical drives. Upon failure of one of the plurality of physical drives, data stored in the failed physical drives can be reconstructed and stored to spare space of the surviving physical drives. After reconstruction, the plurality of logical drives remains parity-declustered on the plurality of surviving physical drives.