Disk I/O is increasingly the performance bottleneck in computer systems despite rapidly increasing disk data transfer rates. In this paper, we propose Automatic Locality-Improving Storage (ALIS), an introspective storage system that automatically reorganizes selected disk blocks based on the dynamic reference stream to increase effective storage performance. ALIS is based on the observations that sequential data fetch is far more efficient than random access, that improving seek distances produces only marginal performance improvements, and that the increasingly powerful processors and large memories in storage systems have ample capacity to reorganize the data layout and redirect the accesses so as to take advantage of rapid sequential data transfer. Using trace-driven simulation with a large set of real workloads, we demonstrate that ALIS considerably outperforms prior techniques, improving the average read performance by up to 50% for server workloads and by about 15% for personal computer workloads. We also show that the performance improvement persists as disk technology evolves. Since disk performance in practice is increasing by only about 8% per year, the benefit of ALIS may correspond to as much as several years of technological progress.