A method, system, and program for managing on-demand email storage are provided. An email service provider allocates a predetermined amount of storage space to an intended recipient. When an email is received for the intended recipient at the email service provider, the email service provider determines whether the predetermined storage space has sufficient capacity for storage of the email. If the predetermined storage space is insufficient for storage of the email, then the email service provider allocates on-demand storage space to the intended recipient. The email service provider then stores the email in the on-demand storage space, such that the email is stored, rather than discarded, when the predetermined storage space reaches full capacity. Before allocating on-demand storage space, the email service provider may compare the email characteristics with predefined criteria set by the intended recipient for emails to be stored in on-demand storage space.