I have grown to like my long-time friends little sister (one year younger than him and I). Anyway, do I tell him first, or almost ask if he is okay with me asking her out? I am very close with his whole family (mom, sister, and brother (my friend for 5 years). So what should I say to him? And would it end up being weird because of my relationship with the rest of her family?
I'd find out if she's interested in you before involving anyone else. If she's happy to go out with you, why would you need to ask his or anyone else's permission to date her?
if she finds out you've asked her brother instead of talking to her, she'll think you're a mysognistic arsehole.
Of course, if you establish a relationship with his sister, you'll have to tell him eventually. If you guys are indeed such good friends, you should be fine. However, be very careful to not mention anything inappropriate about your relationship to the family, since they will have high expectations of you. But yes. Make sure she likes you first.