The Houston & Texas Central Railroad was constructed through Allen in 1872 to facilitate the transport of people and agricultural products. Allen was named for Ebenezer Allen, a former attorney general of Texas and one of the promoters of the railroad. 

In 1915, the town suffered a devastating fire that destroyed most of the business district between the interurban tracts and the railroad.

Allen remained an agricultural community during the world wars and depression era.

The interurban closed in 1948 and the importance of agriculture to the economic base of Allen began to diminish after World War II.

With the relocation of high technology companies into Allen in the 1960's through the 1990's, the population has increased significantly and Allen is becoming widely known as an ideal community in which to live and work.