On December 4, 2006, Allen scored a season-high of 20 points during a loss to the Chicago Bulls. Two games later, he posted 18 points, 7 rebounds, and 5 steals in a loss to the Suns; 6 of his 7 rebounds were offensive rebounds. On December 15, 2006, against the Denver Nuggets, Allen scored a career-high 30 points to go with 8 rebounds. On January 7, 2007, Allen recorded 21 points, 9 rebounds, and 7 steals in a road loss to the Orlando Magic. In a contest against the Indiana Pacers on January 10, 2007, Allen suffered a season-ending tear of the anterior cruciate ligament (ACL) and medial collateral ligament (MCL) of his left knee; Allen hurt the knee when he landed awkwardly after an uncontested dunk attempt, that came after the whistle, in the final minutes of the 97–84 loss. In his third season, Allen averaged career-highs of 11.5 points, 3.8 rebounds, 1.7 assists, and 1.5 steals per game.