Allen, the son of a physician, was born in Canon City, Colorado, and educated at Brown University. After war service he worked at Washington University, St. Louis, before being appointed (1923) to the chair of anatomy at the University of Missouri. In 1933 he moved to a similar post at Yale and remained there until his death.

In 1923 Allen, working with Edward Doisy, began the modern study of the sex hormones. It was widely thought that the female reproductive cycle was under the control of some substance found in the corpus luteum, the body formed in the ovary after ovulation. Allen thought rather that the active ingredient was probably in the follicles surrounding the ovum. To test this he made an extract of the follicular fluid and found that on injection it induced the physiological changes normally found only in the estrous cycle. Allen had in fact discovered estrogen although it was only identified some six years later by Adolf Butenandt.