Fragmentation of storage is a common phenomenon in both main storage and secondary storage. Fragmentation in secondary storage not only jeopardizes the allocation of space but also, since secondary storage access time–unlike that in main storage–is typically nonuniform, a decrease in efficiency arising from additional head movement may also result. A fragmented storage exhibits a checkerboard like pattern with free and occupied space alternating one another. Such alternating storage configuration is analyzed using alternating renewal processes. Two main types of storage processing are distinguished: contiguous storage allocation and noncontiguous storage allocation. The latter allows a request to be scattered over different locations while the former requires it to be allocated in a single continuous area. It is found that the reduction in operating efficiency due to fragmentation is quite substantial for both types of processing. The deterioration is especially marked in the former and is strongly affected by 1) the request size and 2) the storage utilization. Expressions for the generating functions of the performance penalties are derived. The results of the model are compared with published measurements and satisfactory agreement is obtained.