The recently proposed Sparse Shape Composition (SSC) opens a new avenue for shape prior modeling. Instead of assuming any parametric model of shape statistics, SSC incorporates shape priors on-the-fly by approximating a shape instance (usually derived from appearance cues) by a sparse combination of shapes in a training repository. Theoretically, one can increase the modeling capability of SSC by including as many training shapes in the repository. However, this strategy confronts two limitations in practice. First, since SSC involves an iterative sparse optimization at run-time, the more shape instances contained in the repository, the less run-time efficiency SSC has. Therefore, a compact and informative shape dictionary is preferred to a large shape repository. Second, in medical imaging applications, training shapes seldom come in one batch. It is very time consuming and sometimes infeasible to reconstruct the shape dictionary every time new training shapes appear. In this paper, we propose an online learning method to address these two limitations. Our method starts from constructing an initial shape dictionary using the K-SVD algorithm. When new training shapes come, instead of re-constructing the dictionary from the ground up, we update the existing one using a block-coordinates descent approach. Using the dynamically updated dictionary, sparse shape composition can be gracefully scaled up to model shape priors from a large number of training shapes without sacrificing run-time efficiency. Our method is validated on lung localization in X-Ray and cardiac segmentation in MRI time series. Compared to the original SSC, it shows comparable performance while being significantly more efficient.