Allen, the youngest of four children, was born in Rochelle, Illinois, the daughter of Dorothea Marie (née Wirth), a homemaker, and James Jefferson Allen, a gas station owner. She has an older brother, David, and two older sisters, Mary and Lynn. Allen attended Rochelle Township High School, and was voted most likely to succeed. She transferred to Northern Illinois University in 1976, where she graduated. Allen began her performing career as a stage actress and on television before making her film debut in the movie, Compromising Positions (1985).
In 1990, Allen married actor Peter Friedman. The couple separated in 2002, but live close to each other to share time with their daughter, Sadie, born in 1994. She has a Boston Terrier named Pippie.
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