Karen Allen was born in Carrollton (October 5, 1951), Illinois, to Ruth Patricia, a teacher, and Carroll Thompson Allen, an FBI agent. She is of English, Irish, Scottish, and Welsh descent. Her father's job forced the family to move often. "I grew up moving almost every year and so I was always the new kid in school and always in a way was deprived of ever really having any lasting friendships", Allen said in 1987. Although Allen says her father was very much involved in the family, she felt that she and her two sisters grew up in a very female-dominated household. After she graduated from DuVal High School, in Lanham, Maryland, at 17, she moved to New York City to study art and design at Fashion Institute of Technology. She later attended the University of Maryland, College Park for a year and a half, and spent time traveling through South and Central America. In 1974, Allen joined Shakespeare & Company in Massachusetts. Three years later, she moved back to New York City and studied at the Lee Strasberg Theater Institute.

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