diff --git a/src/proto_alpha/lib_client/client_proto_args.ml b/src/proto_alpha/lib_client/client_proto_args.ml
index a36daa55b..321012908 100644
--- a/src/proto_alpha/lib_client/client_proto_args.ml
+++ b/src/proto_alpha/lib_client/client_proto_args.ml
@@ -163,6 +163,20 @@ let gas_limit_arg =
            return v
          with _ -> failwith "invalid gas limit (must be a positive number)"))
 
+let storage_limit_arg =
+  arg
+    ~long:"storage-limit"
+    ~short:'S'
+    ~placeholder:"amount"
+    ~doc:"Set the storage limit of the transaction instead \
+          of letting the client decide based on a simulation"
+    (parameter (fun _ s ->
+         try
+           let v = Int64.of_string s in
+           assert Compare.Int64.(v >= 0L) ;
+           return v
+         with _ -> failwith "invalid storage limit (must be a positive number of bytes)"))
+
 let max_priority_arg =
   arg
     ~long:"max-priority"
diff --git a/src/proto_alpha/lib_client/client_proto_args.mli b/src/proto_alpha/lib_client/client_proto_args.mli
index 08fc898c7..9049b1a73 100644
--- a/src/proto_alpha/lib_client/client_proto_args.mli
+++ b/src/proto_alpha/lib_client/client_proto_args.mli
@@ -15,6 +15,7 @@ val tez_sym: string
 val init_arg: (string, Proto_alpha.full) Clic.arg
 val fee_arg: (Tez.t, Proto_alpha.full) Clic.arg
 val gas_limit_arg: (Z.t option, Proto_alpha.full) Clic.arg
+val storage_limit_arg: (Int64.t option, Proto_alpha.full) Clic.arg
 val arg_arg: (string, Proto_alpha.full) Clic.arg
 val source_arg: (string option, Proto_alpha.full) Clic.arg
 
diff --git a/src/proto_alpha/lib_client/client_proto_context.ml b/src/proto_alpha/lib_client/client_proto_context.ml
index 6df23ae8d..e09deb5e2 100644
--- a/src/proto_alpha/lib_client/client_proto_context.ml
+++ b/src/proto_alpha/lib_client/client_proto_context.ml
@@ -39,7 +39,7 @@ let append_reveal
 let transfer (cctxt : #Proto_alpha.full)
     block ?confirmations
     ?branch ~source ~src_pk ~src_sk ~destination ?arg
-    ~amount ~fee ?(gas_limit = Z.minus_one) () =
+    ~amount ~fee ?(gas_limit = Z.minus_one) ?(storage_limit = -1L) () =
   begin match arg with
     | Some arg ->
         parse_expression arg >>=? fun { expanded = arg } ->
@@ -54,7 +54,7 @@ let transfer (cctxt : #Proto_alpha.full)
   let contents =
     Sourced_operation
       (Manager_operations { source ; fee ; counter ;
-                            gas_limit ; operations }) in
+                            gas_limit ; storage_limit ; operations }) in
   Injection.inject_operation cctxt block ?confirmations
     ?branch ~src_sk contents >>=? fun (_oph, _op, result as res) ->
   Lwt.return (Injection.originated_contracts result) >>=? fun contracts ->
@@ -70,18 +70,19 @@ let reveal cctxt
   | [] ->
       failwith "The manager key was previously revealed."
   | _ :: _ ->
-      let gas_limit = Z.zero in
       let contents =
         Sourced_operation
           (Manager_operations { source ; fee ; counter ;
-                                gas_limit ; operations }) in
+                                gas_limit = Z.zero ; storage_limit = 0L ;
+                                operations }) in
       Injection.inject_operation cctxt block ?confirmations
         ?branch ~src_sk contents >>=? fun res ->
       return res
 
 let originate
     cctxt block ?confirmations
-    ?branch ~source ~src_pk ~src_sk ~fee ?(gas_limit = Z.minus_one) origination =
+    ?branch ~source ~src_pk ~src_sk ~fee
+    ?(gas_limit = Z.minus_one) ?(storage_limit = -1L) origination =
   Alpha_services.Contract.counter cctxt block source >>=? fun pcounter ->
   let counter = Int32.succ pcounter in
   let operations = [origination] in
@@ -90,7 +91,7 @@ let originate
   let contents =
     Sourced_operation
       (Manager_operations { source ; fee ; counter ;
-                            gas_limit ; operations }) in
+                            gas_limit ; storage_limit ; operations }) in
   Injection.inject_operation cctxt block ?confirmations
     ?branch ~src_sk contents >>=? fun (_oph, _op, result as res) ->
   Lwt.return (Injection.originated_contracts result) >>=? function
@@ -129,7 +130,8 @@ let delegate_contract cctxt
   let contents =
     Sourced_operation
       (Manager_operations { source ; fee ; counter ;
-                            gas_limit = Z.zero ; operations }) in
+                            gas_limit = Z.zero ; storage_limit = 0L ;
+                            operations }) in
   Injection.inject_operation cctxt block ?confirmations
     ?branch ~src_sk contents >>=? fun res ->
   return res
@@ -204,6 +206,7 @@ let originate_contract
     block ?confirmations ?branch
     ~fee
     ?gas_limit
+    ?storage_limit
     ~delegate
     ?(delegatable=true)
     ?(spendable=false)
@@ -227,7 +230,7 @@ let originate_contract
                   credit = balance ;
                   preorigination = None } in
   originate cctxt block ?confirmations
-    ?branch ~source ~src_pk ~src_sk ~fee ?gas_limit origination
+    ?branch ~source ~src_pk ~src_sk ~fee ?gas_limit ?storage_limit origination
 
 type activation_key =
   { pkh : Ed25519.Public_key_hash.t ;
diff --git a/src/proto_alpha/lib_client/client_proto_context.mli b/src/proto_alpha/lib_client/client_proto_context.mli
index c0fbced42..734476eec 100644
--- a/src/proto_alpha/lib_client/client_proto_context.mli
+++ b/src/proto_alpha/lib_client/client_proto_context.mli
@@ -89,6 +89,7 @@ val originate_contract:
   ?branch:int ->
   fee:Tez.t ->
   ?gas_limit:Z.t ->
+  ?storage_limit:Int64.t ->
   delegate:public_key_hash option ->
   ?delegatable:bool ->
   ?spendable:bool ->
@@ -114,6 +115,7 @@ val transfer :
   amount:Tez.t ->
   fee:Tez.t ->
   ?gas_limit:Z.t ->
+  ?storage_limit:Int64.t ->
   unit ->
   (Injection.result * Contract.t list) tzresult Lwt.t
 
diff --git a/src/proto_alpha/lib_client/injection.ml b/src/proto_alpha/lib_client/injection.ml
index 0716b58fb..b286dfc97 100644
--- a/src/proto_alpha/lib_client/injection.ml
+++ b/src/proto_alpha/lib_client/injection.ml
@@ -72,6 +72,22 @@ let estimated_gas = function
         (Ok Z.zero) operation_results
   | _ -> Ok Z.zero
 
+let estimated_storage = function
+  | Sourced_operation_result (Manager_operations_result { operation_results }) ->
+      List.fold_left
+        (fun acc (_, r) -> acc >>? fun acc ->
+          match r with
+          | Applied (Transaction_result { storage_size_diff }
+                    | Origination_result { storage_size_diff }) ->
+              Ok (Int64.add storage_size_diff acc)
+          | Applied Reveal_result -> Ok acc
+          | Applied Delegation_result -> Ok acc
+          | Skipped -> assert false
+          | Failed errs -> Alpha_environment.wrap_error (Error errs))
+        (Ok 0L) operation_results >>? fun diff ->
+      Ok (max 0L diff)
+  | _ -> Ok 0L
+
 let originated_contracts = function
   | Sourced_operation_result (Manager_operations_result { operation_results }) ->
       List.fold_left
@@ -87,34 +103,53 @@ let originated_contracts = function
         (Ok []) operation_results
   | _ -> Ok []
 
-let may_patch_gas_limit
+let may_patch_limits
     (cctxt : #Proto_alpha.full) block ?branch
     ?src_sk contents =
   Alpha_services.Constants.hard_gas_limits cctxt block >>=? fun (_, gas_limit) ->
+  Alpha_services.Constants.hard_storage_limits cctxt block >>=? fun (_, storage_limit) ->
   match contents with
   | Sourced_operation (Manager_operations c)
-    when c.gas_limit < Z.zero || gas_limit < c.gas_limit ->
+    when c.gas_limit < Z.zero || gas_limit < c.gas_limit
+         || c.storage_limit < 0L || storage_limit < c.storage_limit ->
       let contents =
-        Sourced_operation (Manager_operations { c with gas_limit }) in
+        Sourced_operation (Manager_operations { c with gas_limit ; storage_limit }) in
       preapply cctxt block ?branch ?src_sk contents >>=? fun (_, _, result) ->
-      Lwt.return (estimated_gas result) >>=? fun gas ->
-      begin
-        if Z.equal gas Z.zero then
-          cctxt#message "Estimated gas: none" >>= fun () ->
-          return Z.zero
-        else
-          cctxt#message
-            "Estimated gas: %s units (will add 100 for safety)"
-            (Z.to_string gas) >>= fun () ->
-          return (Z.add gas (Z.of_int 100))
+      begin if c.gas_limit < Z.zero || gas_limit < c.gas_limit then
+          Lwt.return (estimated_gas result) >>=? fun gas ->
+          begin
+            if Z.equal gas Z.zero then
+              cctxt#message "Estimated gas: none" >>= fun () ->
+              return Z.zero
+            else
+              cctxt#message
+                "Estimated gas: %s units (will add 100 for safety)"
+                (Z.to_string gas) >>= fun () ->
+              return (Z.add gas (Z.of_int 100))
+          end
+        else return c.gas_limit
       end >>=? fun gas_limit ->
-      return (Sourced_operation (Manager_operations { c with gas_limit }))
+      begin if c.storage_limit < 0L || storage_limit < c.storage_limit then
+          Lwt.return (estimated_storage result) >>=? fun storage ->
+          begin
+            if Int64.equal storage 0L then
+              cctxt#message "Estimated storage: no bytes added" >>= fun () ->
+              return 0L
+            else
+              cctxt#message
+                "Estimated storage: %Ld bytes added (will add 20 for safety)"
+                storage >>= fun () ->
+              return (Int64.add storage 20L)
+          end
+        else return c.storage_limit
+      end >>=? fun storage_limit ->
+      return (Sourced_operation (Manager_operations { c with gas_limit ; storage_limit }))
   | op -> return op
 
 let inject_operation
     cctxt block
     ?confirmations ?branch ?src_sk contents =
-  may_patch_gas_limit
+  may_patch_limits
     cctxt block ?branch ?src_sk contents >>=? fun contents ->
   preapply cctxt block
     ?branch ?src_sk contents >>=? fun (_oph, op, result) ->
diff --git a/src/proto_alpha/lib_client/michelson_v1_error_reporter.ml b/src/proto_alpha/lib_client/michelson_v1_error_reporter.ml
index 71a4143ec..c127c672c 100644
--- a/src/proto_alpha/lib_client/michelson_v1_error_reporter.ml
+++ b/src/proto_alpha/lib_client/michelson_v1_error_reporter.ml
@@ -204,9 +204,14 @@ let report_errors ~details ~show_source ?parsed ppf errs =
           print_source (parsed, hilights) ;
         if rest <> [] then Format.fprintf ppf "@," ;
         print_trace (parsed_locations parsed) rest
+    | Alpha_environment.Ecoproto_error Gas.Gas_limit_too_high :: rest ->
+        Format.fprintf ppf
+          "Gas limit for the block is out of the protocol hard bounds." ;
+        if rest <> [] then Format.fprintf ppf "@," ;
+        print_trace locations rest
     | Alpha_environment.Ecoproto_error Gas.Block_quota_exceeded :: rest ->
         Format.fprintf ppf
-          "@[<v 0>Gas limit for the block exceeded during typechecking or execution.@]" ;
+          "Gas limit for the block exceeded during typechecking or execution." ;
         if rest <> [] then Format.fprintf ppf "@," ;
         print_trace locations rest
     | Alpha_environment.Ecoproto_error Gas.Operation_quota_exceeded :: rest ->
@@ -214,6 +219,21 @@ let report_errors ~details ~show_source ?parsed ppf errs =
           "@[<v 0>Gas limit exceeded during typechecking or execution.@,Try again with a higher gas limit.@]" ;
         if rest <> [] then Format.fprintf ppf "@," ;
         print_trace locations rest
+    | Alpha_environment.Ecoproto_error Contract.Storage_limit_too_high :: rest ->
+        Format.fprintf ppf
+          "Storage limit for the block is out of the protocol hard bounds." ;
+        if rest <> [] then Format.fprintf ppf "@," ;
+        print_trace locations rest
+    | Alpha_environment.Ecoproto_error Contract.Block_storage_quota_exceeded :: rest ->
+        Format.fprintf ppf
+          "Storage limit for the block exceeded during typechecking or execution." ;
+        if rest <> [] then Format.fprintf ppf "@," ;
+        print_trace locations rest
+    | Alpha_environment.Ecoproto_error Contract.Operation_storage_quota_exceeded :: rest ->
+        Format.fprintf ppf
+          "@[<v 0>Storage limit exceeded during typechecking or execution.@,Try again with a higher storage limit.@]" ;
+        if rest <> [] then Format.fprintf ppf "@," ;
+        print_trace locations rest
     | Alpha_environment.Ecoproto_error err :: rest ->
         begin match err with
           | Apply.Bad_contract_parameter (c, None, _) ->
diff --git a/src/proto_alpha/lib_client/operation_result.ml b/src/proto_alpha/lib_client/operation_result.ml
index 3d6110b34..aa05ff627 100644
--- a/src/proto_alpha/lib_client/operation_result.ml
+++ b/src/proto_alpha/lib_client/operation_result.ml
@@ -229,7 +229,7 @@ let pp_operation_result ppf ({ contents ; _ }, operation_result) =
           "@[<v 2>Dictator test protocol activation:@,\
            Protocol: %a@]"
           Protocol_hash.pp protocol
-    | Sourced_operation (Manager_operations { source ; fee ; counter ; operations ; gas_limit }),
+    | Sourced_operation (Manager_operations { source ; fee ; counter ; operations ; gas_limit ; storage_limit }),
       Sourced_operation_result (Manager_operations_result { balance_updates ; operation_results }) ->
         let pp_result ppf result =
           Format.fprintf ppf "@," ;
@@ -237,10 +237,9 @@ let pp_operation_result ppf ({ contents ; _ }, operation_result) =
           | Skipped ->
               Format.fprintf ppf
                 "This operation was skipped"
-          | Failed errs ->
+          | Failed _errs ->
               Format.fprintf ppf
-                "@[<v 2>This operation FAILED with the folllowing error:@,%a@]"
-                (Format.pp_print_list Alpha_environment.Error_monad.pp) errs
+                "This operation FAILED."
           | Applied Reveal_result ->
               Format.fprintf ppf
                 "This revelation was successfully applied"
@@ -325,12 +324,14 @@ let pp_operation_result ppf ({ contents ; _ }, operation_result) =
            From: %a@,\
            Fee to the baker: %s%a@,\
            Expected counter: %ld@,\
-           Gas limit: %s"
+           Gas limit: %s@,\
+           Storage limit: %Ld bytes"
           Contract.pp source
           Client_proto_args.tez_sym
           Tez.pp fee
           counter
-          (Z.to_string gas_limit) ;
+          (Z.to_string gas_limit)
+          storage_limit ;
         begin match balance_updates with
           | [] -> ()
           | balance_updates ->
diff --git a/src/proto_alpha/lib_client_commands/client_proto_context_commands.ml b/src/proto_alpha/lib_client_commands/client_proto_context_commands.ml
index e05901e72..27b1429e2 100644
--- a/src/proto_alpha/lib_client_commands/client_proto_context_commands.ml
+++ b/src/proto_alpha/lib_client_commands/client_proto_context_commands.ml
@@ -197,8 +197,8 @@ let commands () =
       end ;
 
     command ~group ~desc: "Launch a smart contract on the blockchain."
-      (args8
-         fee_arg gas_limit_arg delegate_arg (Client_keys.force_switch ())
+      (args9
+         fee_arg gas_limit_arg storage_limit_arg delegate_arg (Client_keys.force_switch ())
          delegatable_switch spendable_switch init_arg no_print_source_flag)
       (prefixes [ "originate" ; "contract" ]
        @@ RawContractAlias.fresh_alias_param
@@ -217,13 +217,13 @@ let commands () =
          ~name:"prg" ~desc: "script of the account\n\
                              Combine with -init if the storage type is not unit."
        @@ stop)
-      begin fun (fee, gas_limit, delegate, force, delegatable, spendable, initial_storage, no_print_source)
+      begin fun (fee, gas_limit, storage_limit, delegate, force, delegatable, spendable, initial_storage, no_print_source)
         alias_name manager balance (_, source) program (cctxt : Proto_alpha.full) ->
         RawContractAlias.of_fresh cctxt force alias_name >>=? fun alias_name ->
         Lwt.return (Micheline_parser.no_parsing_error program) >>=? fun { expanded = code } ->
         source_to_keys cctxt cctxt#block source >>=? fun (src_pk, src_sk) ->
         originate_contract cctxt cctxt#block ?confirmations:cctxt#confirmations
-          ~fee ?gas_limit ~delegate ~delegatable ~spendable ~initial_storage
+          ~fee ?gas_limit ?storage_limit ~delegate ~delegatable ~spendable ~initial_storage
           ~manager ~balance ~source ~src_pk ~src_sk ~code () >>= fun errors ->
         report_michelson_errors ~no_print_source ~msg:"origination simulation failed" cctxt errors >>= function
         | None -> return ()
@@ -233,7 +233,7 @@ let commands () =
       end ;
 
     command ~group ~desc: "Transfer tokens / call a smart contract."
-      (args4 fee_arg gas_limit_arg arg_arg no_print_source_flag)
+      (args5 fee_arg gas_limit_arg storage_limit_arg arg_arg no_print_source_flag)
       (prefixes [ "transfer" ]
        @@ tez_param
          ~name: "qty" ~desc: "amount taken from source"
@@ -244,10 +244,10 @@ let commands () =
        @@ ContractAlias.destination_param
          ~name: "dst" ~desc: "name/literal of the destination contract"
        @@ stop)
-      begin fun (fee, gas_limit, arg, no_print_source) amount (_, source) (_, destination) cctxt ->
+      begin fun (fee, gas_limit, storage_limit, arg, no_print_source) amount (_, source) (_, destination) cctxt ->
         source_to_keys cctxt cctxt#block source >>=? fun (src_pk, src_sk) ->
         transfer cctxt cctxt#block ?confirmations:cctxt#confirmations
-          ~source ~fee ~src_pk ~src_sk ~destination ~arg ~amount ?gas_limit () >>=
+          ~source ~fee ~src_pk ~src_sk ~destination ~arg ~amount ?gas_limit ?storage_limit () >>=
         report_michelson_errors ~no_print_source ~msg:"transfer simulation failed" cctxt >>= function
         | None -> return ()
         | Some (_res, _contracts) ->
diff --git a/src/proto_alpha/lib_protocol/src/TEZOS_PROTOCOL b/src/proto_alpha/lib_protocol/src/TEZOS_PROTOCOL
index dd6fbba25..58533341c 100644
--- a/src/proto_alpha/lib_protocol/src/TEZOS_PROTOCOL
+++ b/src/proto_alpha/lib_protocol/src/TEZOS_PROTOCOL
@@ -20,7 +20,8 @@
         "Cycle_repr",
         "Level_repr",
         "Seed_repr",
-        "Gas_repr",
+        "Gas_limit_repr",
+        "Storage_limit_repr",
         "Script_int_repr",
         "Script_timestamp_repr",
         "Michelson_v1_primitives",
diff --git a/src/proto_alpha/lib_protocol/src/alpha_context.ml b/src/proto_alpha/lib_protocol/src/alpha_context.ml
index 583506008..cb7a6ced6 100644
--- a/src/proto_alpha/lib_protocol/src/alpha_context.ml
+++ b/src/proto_alpha/lib_protocol/src/alpha_context.ml
@@ -62,7 +62,8 @@ end
 module Voting_period = Voting_period_repr
 
 module Gas = struct
-  include Gas_repr
+  include Gas_limit_repr
+  type error += Gas_limit_too_high = Raw_context.Gas_limit_too_high
   let set_limit = Raw_context.set_gas_limit
   let set_unlimited = Raw_context.set_gas_unlimited
   let consume = Raw_context.consume_gas
@@ -78,6 +79,11 @@ module Contract = struct
   include Contract_storage
   let init_origination_nonce = Raw_context.init_origination_nonce
   let unset_origination_nonce = Raw_context.unset_origination_nonce
+  type error += Block_storage_quota_exceeded = Storage_limit_repr.Block_quota_exceeded
+  type error += Operation_storage_quota_exceeded = Storage_limit_repr.Operation_quota_exceeded
+  type error += Storage_limit_too_high = Raw_context.Storage_limit_too_high
+  let set_storage_limit = Raw_context.set_storage_limit
+  let set_storage_unlimited = Raw_context.set_storage_unlimited
 end
 module Delegate = Delegate_storage
 module Roll = struct
diff --git a/src/proto_alpha/lib_protocol/src/alpha_context.mli b/src/proto_alpha/lib_protocol/src/alpha_context.mli
index 33286a727..c6eaa13f3 100644
--- a/src/proto_alpha/lib_protocol/src/alpha_context.mli
+++ b/src/proto_alpha/lib_protocol/src/alpha_context.mli
@@ -121,6 +121,7 @@ module Gas : sig
 
   type error += Block_quota_exceeded (* `Temporary *)
   type error += Operation_quota_exceeded (* `Temporary *)
+  type error += Gas_limit_too_high (* `Permanent *)
 
   val free : cost
   val step_cost : int -> cost
@@ -323,6 +324,8 @@ module Constants : sig
     block_reward: Tez.t ;
     endorsement_reward: Tez.t ;
     cost_per_byte: Tez.t ;
+    hard_storage_limit_per_operation: Int64.t ;
+    hard_storage_limit_per_block: Int64.t ;
   }
   val parametric_encoding: parametric Data_encoding.t
   val parametric: context -> parametric
@@ -338,6 +341,8 @@ module Constants : sig
   val hard_gas_limit_per_operation: context -> Z.t
   val hard_gas_limit_per_block: context -> Z.t
   val cost_per_byte: context -> Tez.t
+  val hard_storage_limit_per_operation: context -> Int64.t
+  val hard_storage_limit_per_block: context -> Int64.t
   val proof_of_work_threshold: context -> int64
   val dictator_pubkey: context -> Signature.Public_key.t
   val max_operation_data_length: context -> int
@@ -542,6 +547,13 @@ module Contract : sig
     Script.expr -> big_map_diff option ->
     context tzresult Lwt.t
 
+  type error += Block_storage_quota_exceeded (* `Temporary *)
+  type error += Operation_storage_quota_exceeded (* `Temporary *)
+  type error += Storage_limit_too_high (* `Permanent *)
+
+  val set_storage_limit: context -> Int64.t -> context tzresult
+  val set_storage_unlimited: context -> context
+
   val used_storage_space: context -> t -> Int64.t tzresult Lwt.t
   val paid_storage_space_fees: context -> t -> Tez.t tzresult Lwt.t
   val pay_for_storage_space: context -> t -> Tez.t -> context tzresult Lwt.t
@@ -750,6 +762,7 @@ and sourced_operation =
       counter: counter ;
       operations: manager_operation list ;
       gas_limit: Z.t ;
+      storage_limit: Int64.t;
     }
   | Dictator_operation of dictator_operation
 
diff --git a/src/proto_alpha/lib_protocol/src/apply.ml b/src/proto_alpha/lib_protocol/src/apply.ml
index d6017eefa..b5abe5bfd 100644
--- a/src/proto_alpha/lib_protocol/src/apply.ml
+++ b/src/proto_alpha/lib_protocol/src/apply.ml
@@ -542,7 +542,7 @@ let apply_manager_operations ctxt source ops =
 
 let apply_sourced_operation ctxt pred_block operation ops =
   match ops with
-  | Manager_operations { source ; fee ; counter ; operations ; gas_limit } ->
+  | Manager_operations { source ; fee ; counter ; operations ; gas_limit ; storage_limit } ->
       let revealed_public_keys =
         List.fold_left (fun acc op ->
             match op with
@@ -564,6 +564,7 @@ let apply_sourced_operation ctxt pred_block operation ops =
       Contract.spend ctxt source fee >>=? fun ctxt ->
       add_fees ctxt fee >>=? fun ctxt ->
       Lwt.return (Gas.set_limit ctxt gas_limit) >>=? fun ctxt ->
+      Lwt.return (Contract.set_storage_limit ctxt storage_limit) >>=? fun ctxt ->
       apply_manager_operations ctxt source operations >>= begin function
         | Ok (ctxt, operation_results) -> return (ctxt, operation_results)
         | Error operation_results -> return (ctxt (* backtracked *), operation_results)
@@ -716,6 +717,7 @@ let apply_operation ctxt pred_block hash operation =
         return (ctxt, Sourced_operation_result result)
   end >>=? fun (ctxt, result) ->
   let ctxt = Gas.set_unlimited ctxt in
+  let ctxt = Contract.set_storage_unlimited ctxt in
   let ctxt = Contract.unset_origination_nonce ctxt in
   return (ctxt, result)
 
diff --git a/src/proto_alpha/lib_protocol/src/constants_repr.ml b/src/proto_alpha/lib_protocol/src/constants_repr.ml
index 65effb20a..8a94563e4 100644
--- a/src/proto_alpha/lib_protocol/src/constants_repr.ml
+++ b/src/proto_alpha/lib_protocol/src/constants_repr.ml
@@ -66,6 +66,8 @@ type parametric = {
   block_reward: Tez_repr.t ;
   endorsement_reward: Tez_repr.t ;
   cost_per_byte: Tez_repr.t ;
+  hard_storage_limit_per_operation: Int64.t ;
+  hard_storage_limit_per_block: Int64.t ;
 }
 
 let default = {
@@ -100,6 +102,8 @@ let default = {
   endorsement_security_deposit = Tez_repr.(mul_exn one 64) ;
   block_reward = Tez_repr.(mul_exn one 16) ;
   endorsement_reward = Tez_repr.(mul_exn one 2) ;
+  hard_storage_limit_per_operation = 60_000L ;
+  hard_storage_limit_per_block = 1_000_000L ;
   cost_per_byte = Tez_repr.of_mutez_exn 1_000L ;
 }
 
@@ -130,7 +134,9 @@ let parametric_encoding =
           c.endorsement_security_deposit,
           c.block_reward),
          (c.endorsement_reward,
-          c.cost_per_byte))) )
+          c.cost_per_byte,
+          c.hard_storage_limit_per_operation,
+          c.hard_storage_limit_per_block))) )
     (fun (( preserved_cycles,
             blocks_per_cycle,
             blocks_per_commitment,
@@ -152,7 +158,9 @@ let parametric_encoding =
             endorsement_security_deposit,
             block_reward),
            (endorsement_reward,
-            cost_per_byte))) ->
+            cost_per_byte,
+            hard_storage_limit_per_operation,
+            hard_storage_limit_per_block))) ->
       { preserved_cycles ;
         blocks_per_cycle ;
         blocks_per_commitment ;
@@ -175,6 +183,8 @@ let parametric_encoding =
         block_reward ;
         endorsement_reward ;
         cost_per_byte ;
+        hard_storage_limit_per_operation ;
+        hard_storage_limit_per_block ;
       } )
     (merge_objs
        (obj10
@@ -200,9 +210,11 @@ let parametric_encoding =
              (req "block_security_deposit" Tez_repr.encoding)
              (req "endorsement_security_deposit" Tez_repr.encoding)
              (req "block_reward" Tez_repr.encoding))
-          (obj2
+          (obj4
              (req "endorsement_reward" Tez_repr.encoding)
-             (req "cost_per_byte" Tez_repr.encoding))))
+             (req "cost_per_byte" Tez_repr.encoding)
+             (req "hard_storage_limit_per_operation" int64)
+             (req "hard_storage_limit_per_block" int64))))
 
 type t = {
   fixed : fixed ;
diff --git a/src/proto_alpha/lib_protocol/src/constants_services.ml b/src/proto_alpha/lib_protocol/src/constants_services.ml
index 65d019f0c..4eb1499ff 100644
--- a/src/proto_alpha/lib_protocol/src/constants_services.ml
+++ b/src/proto_alpha/lib_protocol/src/constants_services.ml
@@ -88,6 +88,14 @@ module S = struct
       ~output: (obj2 (req "per_block" z) (req "per_operation" z))
       RPC_path.(custom_root / "hard_gas_limits")
 
+  let hard_storage_limits =
+    RPC_service.post_service
+      ~description: "Hard maximum amount of bytes stored per operation and per block"
+      ~query: RPC_query.empty
+      ~input: empty
+      ~output: (obj2 (req "per_block" int64) (req "per_operation" int64))
+      RPC_path.(custom_root / "hard_storage_limits")
+
   let cost_per_byte =
     RPC_service.post_service
       ~description: "The cost per bytes added to the storage"
@@ -201,6 +209,10 @@ let () =
     return (Constants.hard_gas_limit_per_block ctxt,
             Constants.hard_gas_limit_per_operation ctxt)
   end ;
+  register0 S.hard_storage_limits begin fun ctxt () () ->
+    return (Constants.hard_storage_limit_per_block ctxt,
+            Constants.hard_storage_limit_per_operation ctxt)
+  end ;
   register0 S.cost_per_byte begin fun ctxt () () ->
     return (Constants.cost_per_byte ctxt)
   end ;
@@ -254,6 +266,8 @@ let hard_gas_limits ctxt block =
   RPC_context.make_call0 S.hard_gas_limits ctxt block () ()
 let cost_per_byte ctxt block =
   RPC_context.make_call0 S.cost_per_byte ctxt block () ()
+let hard_storage_limits ctxt block =
+  RPC_context.make_call0 S.hard_storage_limits ctxt block () ()
 let proof_of_work_threshold ctxt block =
   RPC_context.make_call0 S.proof_of_work_threshold ctxt block () ()
 let seed_nonce_revelation_tip ctxt block =
diff --git a/src/proto_alpha/lib_protocol/src/constants_services.mli b/src/proto_alpha/lib_protocol/src/constants_services.mli
index 0e5cfd628..b48636704 100644
--- a/src/proto_alpha/lib_protocol/src/constants_services.mli
+++ b/src/proto_alpha/lib_protocol/src/constants_services.mli
@@ -36,6 +36,8 @@ val endorsers_per_block:
 val hard_gas_limits:
   'a #RPC_context.simple -> 'a -> (Z.t * Z.t) shell_tzresult Lwt.t
 
+val hard_storage_limits:
+  'a #RPC_context.simple -> 'a -> (Int64.t * Int64.t) shell_tzresult Lwt.t
 
 val cost_per_byte:
   'a #RPC_context.simple -> 'a -> Tez.t shell_tzresult Lwt.t
diff --git a/src/proto_alpha/lib_protocol/src/constants_storage.ml b/src/proto_alpha/lib_protocol/src/constants_storage.ml
index 945a9515b..f6bdb7004 100644
--- a/src/proto_alpha/lib_protocol/src/constants_storage.ml
+++ b/src/proto_alpha/lib_protocol/src/constants_storage.ml
@@ -40,6 +40,12 @@ let hard_gas_limit_per_block c =
 let cost_per_byte c =
   let constants = Raw_context.constants c in
   constants.cost_per_byte
+let hard_storage_limit_per_operation c =
+  let constants = Raw_context.constants c in
+  constants.hard_storage_limit_per_operation
+let hard_storage_limit_per_block c =
+  let constants = Raw_context.constants c in
+  constants.hard_storage_limit_per_block
 let proof_of_work_threshold c =
   let constants = Raw_context.constants c in
   constants.proof_of_work_threshold
diff --git a/src/proto_alpha/lib_protocol/src/gas_repr.ml b/src/proto_alpha/lib_protocol/src/gas_limit_repr.ml
similarity index 98%
rename from src/proto_alpha/lib_protocol/src/gas_repr.ml
rename to src/proto_alpha/lib_protocol/src/gas_limit_repr.ml
index 8646d2048..7f3149527 100644
--- a/src/proto_alpha/lib_protocol/src/gas_repr.ml
+++ b/src/proto_alpha/lib_protocol/src/gas_limit_repr.ml
@@ -89,9 +89,9 @@ let consume block_gas operation_gas cost = match operation_gas with
         Z.sub remaining weighted_cost in
       let block_remaining =
         Z.sub block_gas weighted_cost in
-      if Compare.Z.(remaining <= Z.zero)
+      if Compare.Z.(remaining < Z.zero)
       then error Operation_quota_exceeded
-      else if Compare.Z.(block_remaining <= Z.zero)
+      else if Compare.Z.(block_remaining < Z.zero)
       then error Block_quota_exceeded
       else ok (block_remaining, Limited { remaining })
 
diff --git a/src/proto_alpha/lib_protocol/src/gas_repr.mli b/src/proto_alpha/lib_protocol/src/gas_limit_repr.mli
similarity index 100%
rename from src/proto_alpha/lib_protocol/src/gas_repr.mli
rename to src/proto_alpha/lib_protocol/src/gas_limit_repr.mli
diff --git a/src/proto_alpha/lib_protocol/src/helpers_services.ml b/src/proto_alpha/lib_protocol/src/helpers_services.ml
index f4091e996..d2a10120e 100644
--- a/src/proto_alpha/lib_protocol/src/helpers_services.ml
+++ b/src/proto_alpha/lib_protocol/src/helpers_services.ml
@@ -300,7 +300,8 @@ module Forge = struct
   module Manager = struct
 
     let operations ctxt
-        block ~branch ~source ?sourcePubKey ~counter ~fee ~gas_limit operations =
+        block ~branch ~source ?sourcePubKey ~counter ~fee
+        ~gas_limit ~storage_limit operations =
       Contract_services.manager_key ctxt block source >>= function
       | Error _ as e -> Lwt.return e
       | Ok (_, revealed) ->
@@ -313,18 +314,22 @@ module Forge = struct
                 | Some pk -> Reveal pk :: operations in
           let ops =
             Manager_operations { source ;
-                                 counter ; operations ; fee ; gas_limit } in
+                                 counter ; operations ; fee ;
+                                 gas_limit ; storage_limit } in
           (RPC_context.make_call0 S.operations ctxt block
              () ({ branch }, Sourced_operation ops))
 
     let reveal ctxt
         block ~branch ~source ~sourcePubKey ~counter ~fee ()=
-      operations ctxt block ~branch ~source ~sourcePubKey ~counter ~fee ~gas_limit:Z.zero []
+      operations ctxt block ~branch ~source ~sourcePubKey ~counter ~fee
+        ~gas_limit:Z.zero ~storage_limit:0L []
 
     let transaction ctxt
         block ~branch ~source ?sourcePubKey ~counter
-        ~amount ~destination ?parameters ~gas_limit ~fee ()=
-      operations ctxt block ~branch ~source ?sourcePubKey ~counter ~fee ~gas_limit
+        ~amount ~destination ?parameters
+        ~gas_limit ~storage_limit ~fee ()=
+      operations ctxt block ~branch ~source ?sourcePubKey ~counter
+        ~fee ~gas_limit ~storage_limit
         Alpha_context.[Transaction { amount ; parameters ; destination }]
 
     let origination ctxt
@@ -334,8 +339,9 @@ module Forge = struct
         ?(spendable = true)
         ?(delegatable = true)
         ?delegatePubKey ?script
-        ~gas_limit ~fee () =
-      operations ctxt block ~branch ~source ?sourcePubKey ~counter ~fee ~gas_limit
+        ~gas_limit ~storage_limit ~fee () =
+      operations ctxt block ~branch ~source ?sourcePubKey ~counter
+        ~fee ~gas_limit ~storage_limit
         Alpha_context.[
           Origination { manager = managerPubKey ;
                         delegate = delegatePubKey ;
@@ -348,7 +354,8 @@ module Forge = struct
 
     let delegation ctxt
         block ~branch ~source ?sourcePubKey ~counter ~fee delegate =
-      operations ctxt block ~branch ~source ?sourcePubKey ~counter ~fee ~gas_limit:Z.zero
+      operations ctxt block ~branch ~source ?sourcePubKey ~counter ~fee
+        ~gas_limit:Z.zero ~storage_limit:0L
         Alpha_context.[Delegation delegate]
 
   end
diff --git a/src/proto_alpha/lib_protocol/src/helpers_services.mli b/src/proto_alpha/lib_protocol/src/helpers_services.mli
index d38ec5473..afebbfa55 100644
--- a/src/proto_alpha/lib_protocol/src/helpers_services.mli
+++ b/src/proto_alpha/lib_protocol/src/helpers_services.mli
@@ -72,6 +72,7 @@ module Forge : sig
       counter:int32 ->
       fee:Tez.t ->
       gas_limit:Z.t ->
+      storage_limit:Int64.t ->
       manager_operation list -> MBytes.t shell_tzresult Lwt.t
 
     val reveal:
@@ -93,6 +94,7 @@ module Forge : sig
       destination:Contract.t ->
       ?parameters:Script.expr ->
       gas_limit:Z.t ->
+      storage_limit:Int64.t ->
       fee:Tez.t ->
       unit -> MBytes.t shell_tzresult Lwt.t
 
@@ -109,6 +111,7 @@ module Forge : sig
       ?delegatePubKey: public_key_hash ->
       ?script:Script.t ->
       gas_limit:Z.t ->
+      storage_limit:Int64.t ->
       fee:Tez.t->
       unit -> MBytes.t shell_tzresult Lwt.t
 
diff --git a/src/proto_alpha/lib_protocol/src/operation_repr.ml b/src/proto_alpha/lib_protocol/src/operation_repr.ml
index 6aed575cf..85abd36b7 100644
--- a/src/proto_alpha/lib_protocol/src/operation_repr.ml
+++ b/src/proto_alpha/lib_protocol/src/operation_repr.ml
@@ -56,6 +56,7 @@ and sourced_operation =
       counter: counter ;
       operations: manager_operation list ;
       gas_limit: Z.t;
+      storage_limit: Int64.t;
     }
   | Dictator_operation of dictator_operation
 
@@ -186,7 +187,7 @@ module Encoding = struct
       (fun ((), key) -> Delegation key)
 
   let manager_kind_encoding =
-    obj6
+    obj7
       (req "kind" (constant "manager"))
       (req "source" Contract_repr.encoding)
       (req "fee" Tez_repr.encoding)
@@ -199,15 +200,16 @@ module Encoding = struct
               delegation_case (Tag 3) ;
             ])))
       (req "gas_limit" z)
+      (req "storage_limit" int64)
 
   let manager_kind_case tag =
     case tag ~name:"Manager operations" manager_kind_encoding
       (function
-        | Manager_operations { source; fee ; counter ; operations ; gas_limit } ->
-            Some ((), source, fee, counter, operations, gas_limit)
+        | Manager_operations { source; fee ; counter ; operations ; gas_limit ; storage_limit } ->
+            Some ((), source, fee, counter, operations, gas_limit, storage_limit)
         | _ -> None)
-      (fun ((), source, fee, counter, operations, gas_limit) ->
-         Manager_operations { source; fee ; counter ; operations ; gas_limit })
+      (fun ((), source, fee, counter, operations, gas_limit, storage_limit) ->
+         Manager_operations { source; fee ; counter ; operations ; gas_limit ; storage_limit })
 
   let endorsement_encoding =
     (* describe ~title:"Endorsement operation" @@ *)
diff --git a/src/proto_alpha/lib_protocol/src/operation_repr.mli b/src/proto_alpha/lib_protocol/src/operation_repr.mli
index fac1715cb..fc43f5465 100644
--- a/src/proto_alpha/lib_protocol/src/operation_repr.mli
+++ b/src/proto_alpha/lib_protocol/src/operation_repr.mli
@@ -56,6 +56,7 @@ and sourced_operation =
       counter: counter ;
       operations: manager_operation list ;
       gas_limit: Z.t ;
+      storage_limit: Int64.t;
     }
   | Dictator_operation of dictator_operation
 
diff --git a/src/proto_alpha/lib_protocol/src/parameters_repr.ml b/src/proto_alpha/lib_protocol/src/parameters_repr.ml
index dcae8b6c7..e43c591ba 100644
--- a/src/proto_alpha/lib_protocol/src/parameters_repr.ml
+++ b/src/proto_alpha/lib_protocol/src/parameters_repr.ml
@@ -105,6 +105,12 @@ let constants_encoding =
        and cost_per_byte =
          opt Tez_repr.(=)
            default.cost_per_byte c.cost_per_byte
+       and hard_storage_limit_per_operation =
+         opt Compare.Int64.(=)
+           default.hard_storage_limit_per_operation c.hard_storage_limit_per_operation
+       and hard_storage_limit_per_block =
+         opt Compare.Int64.(=)
+           default.hard_storage_limit_per_block c.hard_storage_limit_per_block
        in
        (( preserved_cycles,
           blocks_per_cycle,
@@ -127,7 +133,9 @@ let constants_encoding =
           endorsement_security_deposit,
           block_reward),
          (endorsement_reward,
-          cost_per_byte))))
+          cost_per_byte,
+          hard_storage_limit_per_operation,
+          hard_storage_limit_per_block))))
     (fun (( preserved_cycles,
             blocks_per_cycle,
             blocks_per_commitment,
@@ -149,7 +157,9 @@ let constants_encoding =
             endorsement_security_deposit,
             block_reward),
            (endorsement_reward,
-            cost_per_byte))) ->
+            cost_per_byte,
+            hard_storage_limit_per_operation,
+            hard_storage_limit_per_block))) ->
       let unopt def = function None -> def | Some v -> v in
       let default = Constants_repr.default in
       { Constants_repr.preserved_cycles =
@@ -197,6 +207,10 @@ let constants_encoding =
           unopt default.endorsement_reward endorsement_reward ;
         cost_per_byte =
           unopt default.cost_per_byte cost_per_byte ;
+        hard_storage_limit_per_operation =
+          unopt default.hard_storage_limit_per_operation hard_storage_limit_per_operation ;
+        hard_storage_limit_per_block =
+          unopt default.hard_storage_limit_per_block hard_storage_limit_per_block ;
       } )
     (merge_objs
        (obj10
@@ -222,9 +236,11 @@ let constants_encoding =
              (opt "block_security_deposit" Tez_repr.encoding)
              (opt "endorsement_security_deposit" Tez_repr.encoding)
              (opt "block_reward" Tez_repr.encoding))
-          (obj2
+          (obj4
              (opt "endorsement_reward" Tez_repr.encoding)
-             (opt "cost_per_byte" Tez_repr.encoding))))
+             (opt "cost_per_byte" Tez_repr.encoding)
+             (opt "hard_storage_limit_per_operation" int64)
+             (opt "hard_storage_limit_per_block" int64))))
 
 let encoding =
   let open Data_encoding in
diff --git a/src/proto_alpha/lib_protocol/src/raw_context.ml b/src/proto_alpha/lib_protocol/src/raw_context.ml
index 8a50d5c96..25cc506ca 100644
--- a/src/proto_alpha/lib_protocol/src/raw_context.ml
+++ b/src/proto_alpha/lib_protocol/src/raw_context.ml
@@ -20,7 +20,9 @@ type t = {
   fees: Tez_repr.t ;
   rewards: Tez_repr.t ;
   block_gas: Z.t ;
-  operation_gas: Gas_repr.t ;
+  operation_gas: Gas_limit_repr.t ;
+  block_storage: Int64.t ;
+  operation_storage: Storage_limit_repr.t ;
   origination_nonce: Contract_repr.origination_nonce option ;
 }
 
@@ -92,7 +94,7 @@ let () =
   register_error_kind
     `Permanent
     ~id:"gas_limit_too_high"
-    ~title: "Gas limit higher than the hard limit"
+    ~title: "Gas limit out of protocol hard bounds"
     ~description:
       "A transaction tried to exceed the hard limit on gas"
     empty
@@ -100,18 +102,44 @@ let () =
     (fun () -> Gas_limit_too_high)
 
 let set_gas_limit ctxt remaining =
-  if Compare.Z.(remaining > ctxt.constants.hard_gas_limit_per_operation) then
+  if Compare.Z.(remaining > ctxt.constants.hard_gas_limit_per_operation)
+  || Compare.Z.(remaining < Z.zero) then
     error Gas_limit_too_high
   else
     ok { ctxt with operation_gas = Limited { remaining } }
 let set_gas_unlimited ctxt =
   { ctxt with operation_gas = Unaccounted }
 let consume_gas ctxt cost =
-  Gas_repr.consume ctxt.block_gas ctxt.operation_gas cost >>? fun (block_gas, operation_gas) ->
+  Gas_limit_repr.consume ctxt.block_gas ctxt.operation_gas cost >>? fun (block_gas, operation_gas) ->
   ok { ctxt with block_gas ; operation_gas }
 let gas_level ctxt = ctxt.operation_gas
 let block_gas_level ctxt = ctxt.block_gas
 
+type error += Storage_limit_too_high (* `Permanent *)
+
+let () =
+  let open Data_encoding in
+  register_error_kind
+    `Permanent
+    ~id:"storage_limit_too_high"
+    ~title: "Storage limit out of protocol hard bounds"
+    ~description:
+      "A transaction tried to exceed the hard limit on storage"
+    empty
+    (function Storage_limit_too_high -> Some () | _ -> None)
+    (fun () -> Storage_limit_too_high)
+
+let set_storage_limit ctxt remaining =
+  if Compare.Int64.(remaining > ctxt.constants.hard_storage_limit_per_operation)
+  || Compare.Int64.(remaining < 0L)then
+    error Storage_limit_too_high
+  else
+    ok { ctxt with operation_storage = Limited { remaining } }
+let set_storage_unlimited ctxt =
+  { ctxt with operation_storage = Unaccounted }
+let record_bytes_stored ctxt bytes =
+  Storage_limit_repr.consume ctxt.block_storage ctxt.operation_storage ~bytes >>? fun (block_storage, operation_storage) ->
+  ok { ctxt with block_storage ; operation_storage }
 
 type storage_error =
   | Incompatible_protocol_version of string
@@ -331,6 +359,8 @@ let prepare ~level ~timestamp ~fitness ctxt =
     rewards = Tez_repr.zero ;
     operation_gas = Unaccounted ;
     block_gas = constants.Constants_repr.hard_gas_limit_per_block ;
+    operation_storage = Unaccounted ;
+    block_storage = constants.Constants_repr.hard_storage_limit_per_block ;
     origination_nonce = None ;
   }
 
@@ -378,6 +408,8 @@ let register_resolvers enc resolve =
       rewards = Tez_repr.zero ;
       block_gas = Constants_repr.default.hard_gas_limit_per_block ;
       operation_gas = Unaccounted ;
+      block_storage = Constants_repr.default.hard_storage_limit_per_block ;
+      operation_storage = Unaccounted ;
       origination_nonce = None ;
     } in
     resolve faked_context str in
@@ -421,7 +453,9 @@ module type T = sig
 
   val absolute_key: context -> key -> key
 
-  val consume_gas: context -> Gas_repr.cost -> context tzresult
+  val consume_gas: context -> Gas_limit_repr.cost -> context tzresult
+
+  val record_bytes_stored: context -> Int64.t -> context tzresult
 
 end
 
diff --git a/src/proto_alpha/lib_protocol/src/raw_context.mli b/src/proto_alpha/lib_protocol/src/raw_context.mli
index fa8b62dbe..2ddd40861 100644
--- a/src/proto_alpha/lib_protocol/src/raw_context.mli
+++ b/src/proto_alpha/lib_protocol/src/raw_context.mli
@@ -79,9 +79,14 @@ type error += Gas_limit_too_high (* `Permanent *)
 
 val set_gas_limit: t -> Z.t -> t tzresult
 val set_gas_unlimited: t -> t
-val gas_level: t -> Gas_repr.t
+val gas_level: t -> Gas_limit_repr.t
 val block_gas_level: t -> Z.t
 
+type error += Storage_limit_too_high (* `Permanent *)
+
+val set_storage_limit: t -> Int64.t -> t tzresult
+val set_storage_unlimited: t -> t
+
 type error += Undefined_operation_nonce (* `Permanent *)
 
 val init_origination_nonce: t -> Operation_hash.t -> t
@@ -171,7 +176,11 @@ module type T = sig
 
   (** Internally used in {!Storage_functors} to consume gas from
       within a view. *)
-  val consume_gas: context -> Gas_repr.cost -> context tzresult
+  val consume_gas: context -> Gas_limit_repr.cost -> context tzresult
+
+  (** Internally used in {!Storage_functors} to consume storage from
+      within a view. *)
+  val record_bytes_stored: context -> Int64.t -> context tzresult
 
 end
 
diff --git a/src/proto_alpha/lib_protocol/src/storage_functors.ml b/src/proto_alpha/lib_protocol/src/storage_functors.ml
index 23d8fdc5e..2c2d76641 100644
--- a/src/proto_alpha/lib_protocol/src/storage_functors.ml
+++ b/src/proto_alpha/lib_protocol/src/storage_functors.ml
@@ -89,6 +89,7 @@ module Make_subcontext (C : Raw_context.T) (N : NAME)
   let project = C.project
   let absolute_key c k = C.absolute_key c (to_key k)
   let consume_gas = C.consume_gas
+  let record_bytes_stored = C.record_bytes_stored
 end
 
 module Make_single_data_storage (C : Raw_context.T) (N : NAME) (V : VALUE)
@@ -139,7 +140,7 @@ module Make_single_carbonated_data_storage
   type context = t
   type value = V.t
   let consume_mem_gas c =
-    Lwt.return (C.consume_gas c (Gas_repr.read_bytes_cost Z.zero))
+    Lwt.return (C.consume_gas c (Gas_limit_repr.read_bytes_cost Z.zero))
   let existing_size c =
     match V.size with
     | Fixed len ->
@@ -152,26 +153,26 @@ module Make_single_carbonated_data_storage
   let consume_read_gas get c =
     match V.size with
     | Fixed len ->
-        Lwt.return (C.consume_gas c (Gas_repr.read_bytes_cost (Z.of_int len)))
+        Lwt.return (C.consume_gas c (Gas_limit_repr.read_bytes_cost (Z.of_int len)))
     | Variable ->
         get c (len_name N.name) >>=? fun len ->
         decode_len_value N.name len >>=? fun len ->
-        Lwt.return (C.consume_gas c (Gas_repr.read_bytes_cost (Z.of_int len)))
+        Lwt.return (C.consume_gas c (Gas_limit_repr.read_bytes_cost (Z.of_int len)))
   let consume_write_gas set c v =
     match V.size with
     | Fixed s ->
-        Lwt.return (C.consume_gas c (Gas_repr.write_bytes_cost (Z.of_int s))) >>=? fun c ->
+        Lwt.return (C.consume_gas c (Gas_limit_repr.write_bytes_cost (Z.of_int s))) >>=? fun c ->
         return (c, V.to_bytes v)
     | Variable ->
         let bytes = V.to_bytes v in
         let len = MBytes.length bytes in
-        Lwt.return (C.consume_gas c (Gas_repr.write_bytes_cost (Z.of_int len))) >>=? fun c ->
+        Lwt.return (C.consume_gas c (Gas_limit_repr.write_bytes_cost (Z.of_int len))) >>=? fun c ->
         set c (len_name N.name) (encode_len_value bytes) >>=? fun c ->
         return (c, bytes)
   let consume_remove_gas del c =
     match V.size with
     | Fixed _ | Variable ->
-        Lwt.return (C.consume_gas c (Gas_repr.write_bytes_cost Z.zero)) >>=? fun c ->
+        Lwt.return (C.consume_gas c (Gas_limit_repr.write_bytes_cost Z.zero)) >>=? fun c ->
         del c (len_name N.name)
   let mem c =
     consume_mem_gas c >>=? fun c ->
@@ -192,30 +193,38 @@ module Make_single_carbonated_data_storage
     else
       return (C.project c, None)
   let init c v =
+    consume_write_gas C.set c v >>=? fun (c, bytes) ->
+    C.init c N.name bytes >>=? fun c ->
+    let size = MBytes.length bytes in
+    Lwt.return (C.record_bytes_stored c (Int64.of_int size)) >>=? fun c ->
+    return (C.project c, size)
+  let set c v =
     consume_write_gas C.init c v >>=? fun (c, bytes) ->
     existing_size c >>=? fun prev_size ->
-    C.init c N.name bytes >>=? fun c ->
-    return (C.project c, MBytes.length bytes - prev_size)
-  let set c v =
-    consume_write_gas C.set c v >>=? fun (c, bytes) ->
     C.set c N.name bytes >>=? fun c ->
-    return (C.project c, MBytes.length bytes)
+    let size_diff = MBytes.length bytes - prev_size in
+    Lwt.return (C.record_bytes_stored c (Int64.of_int size_diff)) >>=? fun c ->
+    return (C.project c, size_diff)
   let init_set c v =
     let init_set c k v = C.init_set c k v >>= return in
     consume_write_gas init_set c v >>=? fun (c, bytes) ->
     existing_size c >>=? fun prev_size ->
     init_set c N.name bytes >>=? fun c ->
-    return (C.project c, MBytes.length bytes - prev_size)
+    let size_diff = MBytes.length bytes - prev_size in
+    Lwt.return (C.record_bytes_stored c (Int64.of_int size_diff)) >>=? fun c ->
+    return (C.project c, size_diff)
   let remove c =
     let remove c k = C.remove c k >>= return in
     consume_remove_gas remove c >>=? fun c ->
     existing_size c >>=? fun prev_size ->
     remove c N.name >>=? fun c ->
+    Lwt.return (C.record_bytes_stored c (Int64.of_int ~-prev_size)) >>=? fun c ->
     return (C.project c, prev_size)
   let delete c =
     consume_remove_gas C.delete c >>=? fun c ->
     existing_size c >>=? fun prev_size ->
     C.delete c N.name >>=? fun c ->
+    Lwt.return (C.record_bytes_stored c (Int64.of_int ~-prev_size)) >>=? fun c ->
     return (C.project c, prev_size)
   let set_option c v =
     match v with
@@ -392,7 +401,7 @@ module Make_indexed_carbonated_data_storage
     | [ last ] -> Compare.Char.(=) (String.get last (String.length last - 1)) '$'
     | _ :: rest -> is_len_name rest
   let consume_mem_gas c =
-    Lwt.return (C.consume_gas c (Gas_repr.read_bytes_cost Z.zero))
+    Lwt.return (C.consume_gas c (Gas_limit_repr.read_bytes_cost Z.zero))
   let existing_size c i =
     match V.size with
     | Fixed len ->
@@ -405,26 +414,26 @@ module Make_indexed_carbonated_data_storage
   let consume_read_gas get c i =
     match V.size with
     | Fixed len ->
-        Lwt.return (C.consume_gas c (Gas_repr.read_bytes_cost (Z.of_int len)))
+        Lwt.return (C.consume_gas c (Gas_limit_repr.read_bytes_cost (Z.of_int len)))
     | Variable ->
         get c (len_name i) >>=? fun len ->
         decode_len_value (name i) len >>=? fun len ->
-        Lwt.return (C.consume_gas c (Gas_repr.read_bytes_cost (Z.of_int len)))
+        Lwt.return (C.consume_gas c (Gas_limit_repr.read_bytes_cost (Z.of_int len)))
   let consume_write_gas set c i v =
     match V.size with
     | Fixed s ->
-        Lwt.return (C.consume_gas c (Gas_repr.write_bytes_cost (Z.of_int s))) >>=? fun c ->
+        Lwt.return (C.consume_gas c (Gas_limit_repr.write_bytes_cost (Z.of_int s))) >>=? fun c ->
         return (c, V.to_bytes v)
     | Variable ->
         let bytes = V.to_bytes v in
         let len = MBytes.length bytes in
-        Lwt.return (C.consume_gas c (Gas_repr.write_bytes_cost (Z.of_int len))) >>=? fun c ->
+        Lwt.return (C.consume_gas c (Gas_limit_repr.write_bytes_cost (Z.of_int len))) >>=? fun c ->
         set c (len_name i) (encode_len_value bytes) >>=? fun c ->
         return (c, bytes)
   let consume_remove_gas del c i =
     match V.size with
     | Fixed _ | Variable ->
-        Lwt.return (C.consume_gas c (Gas_repr.write_bytes_cost Z.zero)) >>=? fun c ->
+        Lwt.return (C.consume_gas c (Gas_limit_repr.write_bytes_cost Z.zero)) >>=? fun c ->
         del c (len_name i)
   let mem s i =
     consume_mem_gas s >>=? fun s ->
@@ -448,27 +457,35 @@ module Make_indexed_carbonated_data_storage
     consume_write_gas C.set s i v >>=? fun (s, bytes) ->
     existing_size s i >>=? fun prev_size ->
     C.set s (name i) bytes >>=? fun t ->
-    return (C.project t, MBytes.length bytes - prev_size)
+    let size_diff = MBytes.length bytes - prev_size in
+    Lwt.return (C.record_bytes_stored t (Int64.of_int size_diff)) >>=? fun t ->
+    return (C.project t, size_diff)
   let init s i v =
     consume_write_gas C.init s i v >>=? fun (s, bytes) ->
     C.init s (name i) bytes >>=? fun t ->
-    return (C.project t, MBytes.length bytes)
+    let size = MBytes.length bytes in
+    Lwt.return (C.record_bytes_stored t (Int64.of_int size)) >>=? fun t ->
+    return (C.project t, size)
   let init_set s i v =
     let init_set s i v = C.init_set s i v >>= return in
     consume_write_gas init_set s i v >>=? fun (s, bytes) ->
     existing_size s i >>=? fun prev_size ->
     init_set s (name i) bytes >>=? fun t ->
-    return (C.project t, MBytes.length bytes - prev_size)
+    let size_diff = MBytes.length bytes - prev_size in
+    Lwt.return (C.record_bytes_stored t (Int64.of_int size_diff)) >>=? fun t ->
+    return (C.project t, size_diff)
   let remove s i =
     let remove s i = C.remove s i >>= return in
     consume_remove_gas remove s i >>=? fun s ->
     existing_size s i >>=? fun prev_size ->
     remove s (name i) >>=? fun t ->
+    Lwt.return (C.record_bytes_stored t (Int64.of_int ~-prev_size)) >>=? fun t ->
     return (C.project t, prev_size)
   let delete s i =
     consume_remove_gas C.delete s i >>=? fun s ->
     existing_size s i >>=? fun prev_size ->
     C.delete s (name i) >>=? fun t ->
+    Lwt.return (C.record_bytes_stored t (Int64.of_int ~-prev_size)) >>=? fun t ->
     return (C.project t, prev_size)
   let set_option s i v =
     match v with
@@ -512,6 +529,7 @@ module Make_indexed_carbonated_data_storage
       consume_remove_gas C.delete s path >>=? fun s ->
       existing_size s path >>=? fun prev_size ->
       C.delete s (name path) >>=? fun s ->
+      Lwt.return (C.record_bytes_stored s (Int64.of_int ~-prev_size)) >>=? fun s ->
       return (s, Z.add (Z.of_int prev_size) total) in
     fold_keys_unaccounted s ~init:Z.zero ~f
   let fold s ~init ~f =
@@ -610,6 +628,7 @@ module Make_indexed_subcontext (C : Raw_context.T) (I : INDEX)
     let project (t, _) = C.project t
     let absolute_key (t, i) k = C.absolute_key t (to_key i k)
     let consume_gas (t, k) c = C.consume_gas t c >>? fun t -> ok (t, k)
+    let record_bytes_stored (t, k) c = C.record_bytes_stored t c >>? fun t -> ok (t, k)
   end
 
   let fold_keys t ~init ~f =
@@ -766,7 +785,7 @@ module Make_indexed_subcontext (C : Raw_context.T) (I : INDEX)
     type key = I.t
     type value = V.t
     let consume_mem_gas c =
-      Lwt.return (Raw_context.consume_gas c (Gas_repr.read_bytes_cost Z.zero))
+      Lwt.return (Raw_context.consume_gas c (Gas_limit_repr.read_bytes_cost Z.zero))
     let existing_size c =
       match V.size with
       | Fixed len ->
@@ -779,26 +798,26 @@ module Make_indexed_subcontext (C : Raw_context.T) (I : INDEX)
     let consume_read_gas get c =
       match V.size with
       | Fixed len ->
-          Lwt.return (Raw_context.consume_gas c (Gas_repr.read_bytes_cost (Z.of_int len)))
+          Lwt.return (Raw_context.consume_gas c (Gas_limit_repr.read_bytes_cost (Z.of_int len)))
       | Variable ->
           get c (len_name N.name) >>=? fun len ->
           decode_len_value N.name len >>=? fun len ->
-          Lwt.return (Raw_context.consume_gas c (Gas_repr.read_bytes_cost (Z.of_int len)))
+          Lwt.return (Raw_context.consume_gas c (Gas_limit_repr.read_bytes_cost (Z.of_int len)))
     let consume_write_gas set c v =
       match V.size with
       | Fixed s ->
-          Lwt.return (Raw_context.consume_gas c (Gas_repr.write_bytes_cost (Z.of_int s))) >>=? fun c ->
+          Lwt.return (Raw_context.consume_gas c (Gas_limit_repr.write_bytes_cost (Z.of_int s))) >>=? fun c ->
           return (c, V.to_bytes v)
       | Variable ->
           let bytes = V.to_bytes v in
           let len = MBytes.length bytes in
-          Lwt.return (Raw_context.consume_gas c (Gas_repr.write_bytes_cost (Z.of_int len))) >>=? fun c ->
+          Lwt.return (Raw_context.consume_gas c (Gas_limit_repr.write_bytes_cost (Z.of_int len))) >>=? fun c ->
           set c (len_name N.name) (encode_len_value bytes) >>=? fun c ->
           return (c, bytes)
     let consume_remove_gas del c =
       match V.size with
       | Fixed _ | Variable ->
-          Lwt.return (Raw_context.consume_gas c (Gas_repr.write_bytes_cost Z.zero)) >>=? fun c ->
+          Lwt.return (Raw_context.consume_gas c (Gas_limit_repr.write_bytes_cost Z.zero)) >>=? fun c ->
           del c (len_name N.name)
     let mem s i =
       consume_mem_gas (s, i) >>=? fun c ->
@@ -822,27 +841,35 @@ module Make_indexed_subcontext (C : Raw_context.T) (I : INDEX)
       consume_write_gas Raw_context.set (s, i) v >>=? fun (c, bytes) ->
       existing_size (s, i) >>=? fun prev_size ->
       Raw_context.set c N.name bytes >>=? fun c ->
-      return (Raw_context.project c, MBytes.length bytes - prev_size)
+      let size_diff = MBytes.length bytes - prev_size in
+      Lwt.return (Raw_context.record_bytes_stored c (Int64.of_int size_diff)) >>=? fun c ->
+      return (Raw_context.project c, size_diff)
     let init s i v =
       consume_write_gas Raw_context.init (s, i) v >>=? fun (c, bytes) ->
       Raw_context.init c N.name bytes >>=? fun c ->
-      return (Raw_context.project c, MBytes.length bytes)
+      let size = MBytes.length bytes in
+      Lwt.return (Raw_context.record_bytes_stored c (Int64.of_int size)) >>=? fun c ->
+      return (Raw_context.project c, size)
     let init_set s i v =
       let init_set c k v = Raw_context.init_set c k v >>= return in
       consume_write_gas init_set (s, i) v >>=? fun (c, bytes) ->
       existing_size c >>=? fun prev_size ->
       init_set c N.name bytes >>=? fun c ->
-      return (Raw_context.project c, MBytes.length bytes - prev_size)
+      let size_diff = MBytes.length bytes - prev_size in
+      Lwt.return (Raw_context.record_bytes_stored c (Int64.of_int size_diff)) >>=? fun c ->
+      return (Raw_context.project c, size_diff)
     let remove s i =
       let remove c k = Raw_context.remove c k >>= return in
       consume_remove_gas remove (s, i) >>=? fun c ->
       existing_size (s, i) >>=? fun prev_size ->
       remove c N.name >>=? fun c ->
+      Lwt.return (Raw_context.record_bytes_stored c (Int64.of_int ~-prev_size)) >>=? fun c ->
       return (Raw_context.project c, prev_size)
     let delete s i =
       consume_remove_gas Raw_context.delete (s, i) >>=? fun c ->
       existing_size (s, i) >>=? fun prev_size ->
       Raw_context.delete c N.name >>=? fun c ->
+      Lwt.return (Raw_context.record_bytes_stored c (Int64.of_int ~-prev_size)) >>=? fun c ->
       return (Raw_context.project c, prev_size)
     let set_option s i v =
       match v with
@@ -856,6 +883,7 @@ module Make_indexed_subcontext (C : Raw_context.T) (I : INDEX)
           consume_remove_gas remove (s, i) >>=? fun (s, _) ->
           existing_size (s, i) >>=? fun prev_size ->
           remove (s,i) N.name >>=? fun (s, _) ->
+          Lwt.return (Raw_context.record_bytes_stored (s, i) (Int64.of_int ~-prev_size)) >>=? fun (s, _) ->
           return (s, Z.add total (Z.of_int prev_size))
         end >>=? fun (s, total) ->
       return (C.project s, total)
diff --git a/src/proto_alpha/lib_protocol/src/storage_limit_repr.ml b/src/proto_alpha/lib_protocol/src/storage_limit_repr.ml
new file mode 100644
index 000000000..8584cdf1b
--- /dev/null
+++ b/src/proto_alpha/lib_protocol/src/storage_limit_repr.ml
@@ -0,0 +1,51 @@
+(**************************************************************************)
+(*                                                                        *)
+(*    Copyright (c) 2014 - 2016.                                          *)
+(*    Dynamic Ledger Solutions, Inc. <contact@tezos.com>                  *)
+(*                                                                        *)
+(*    All rights reserved. No warranty, explicit or implicit, provided.   *)
+(*                                                                        *)
+(**************************************************************************)
+
+type t =
+  | Unaccounted
+  | Limited of { remaining : Int64.t }
+
+type error += Block_quota_exceeded (* `Temporary *)
+type error += Operation_quota_exceeded (* `Temporary *)
+
+let () =
+  let open Data_encoding in
+  register_error_kind
+    `Temporary
+    ~id:"storage_exhausted.operation"
+    ~title: "Storage quota exceeded for the operation"
+    ~description:
+      "A script or one of its callee wrote more \
+       bytes than the operation said it would"
+    empty
+    (function Operation_quota_exceeded -> Some () | _ -> None)
+    (fun () -> Operation_quota_exceeded) ;
+  register_error_kind
+    `Temporary
+    ~id:"storage_exhausted.block"
+    ~title: "Storage quota exceeded for the block"
+    ~description:
+      "The sum of storage consumed by all the operations in the block \
+       exceeds the hard storage limit per block"
+    empty
+    (function Block_quota_exceeded -> Some () | _ -> None)
+    (fun () -> Block_quota_exceeded)
+
+let consume block_storage operation_storage ~bytes = match operation_storage with
+  | Unaccounted -> ok (block_storage, Unaccounted)
+  | Limited { remaining } ->
+      let remaining =
+        Int64.sub remaining bytes in
+      let block_remaining =
+        Int64.sub block_storage bytes in
+      if Compare.Int64.(remaining < 0L)
+      then error Operation_quota_exceeded
+      else if Compare.Int64.(block_remaining < 0L)
+      then error Block_quota_exceeded
+      else ok (block_remaining, Limited { remaining })
diff --git a/src/proto_alpha/lib_protocol/src/storage_limit_repr.mli b/src/proto_alpha/lib_protocol/src/storage_limit_repr.mli
new file mode 100644
index 000000000..11dc00af2
--- /dev/null
+++ b/src/proto_alpha/lib_protocol/src/storage_limit_repr.mli
@@ -0,0 +1,17 @@
+(**************************************************************************)
+(*                                                                        *)
+(*    Copyright (c) 2014 - 2016.                                          *)
+(*    Dynamic Ledger Solutions, Inc. <contact@tezos.com>                  *)
+(*                                                                        *)
+(*    All rights reserved. No warranty, explicit or implicit, provided.   *)
+(*                                                                        *)
+(**************************************************************************)
+
+type t =
+  | Unaccounted
+  | Limited of { remaining : Int64.t }
+
+type error += Block_quota_exceeded (* `Temporary *)
+type error += Operation_quota_exceeded (* `Temporary *)
+
+val consume : Int64.t -> t -> bytes:Int64.t -> (Int64.t * t) tzresult
diff --git a/src/proto_alpha/lib_protocol/test/helpers/helpers_operation.ml b/src/proto_alpha/lib_protocol/test/helpers/helpers_operation.ml
index 657139900..9d25dd753 100644
--- a/src/proto_alpha/lib_protocol/test/helpers/helpers_operation.ml
+++ b/src/proto_alpha/lib_protocol/test/helpers/helpers_operation.ml
@@ -26,6 +26,7 @@ let manager (src : Helpers_account.t) ?(fee = Tez.zero) operations context gas_l
     counter ;
     operations = (if revealed then operations else Reveal src.pub :: operations) ;
     gas_limit ;
+    storage_limit = 30_000L ;
   }