Allen was born on January 21, 1953, in Seattle, Washington, to Kenneth Sam Allen and Edna Faye (née Gardner) Allen. He attended Lakeside School, a private school in Seattle where he befriended Bill Gates, with whom he shared an enthusiasm for computers, and they used Lakeside's Teletype terminal to develop their programming skills on several time-sharing computer systems. They also used the laboratory of the Computer Science Department of the University of Washington, doing personal research and computer programming; they were banned from the laboratory in 1971 for abuse of their privileges there.