In 1992, Allen's Division II Vikings visited Bronco Stadium in Boise in late October and soundly defeated the I-AA Boise State Broncos 52–26. After Boise State lost their next three games to close out the season, head coach Skip Hall promptly resigned and Allen and his entire coaching staff were hired away from Portland State. In his second year at Boise State in 1994, he led the Broncos to a 10–1 regular season and a Big Sky championship, the first since 1980. The Broncos were invited to the 16-team Division I-AA playoffs and advanced to the national finals, but lost 24–14 to Jim Tressel's Youngstown State Penguins at Huntington, West Virginia, and finished the season at 13–2. Allen kept his reputation for publicity stunts: during the run to the 1994 national championship game, Allen challenged local supporters, promising to ride a horse in downtown Boise if Bronco Stadium was sold out for their annual rivalry game versus Idaho, who had won twelve straight over the Broncos. The stadium was sold out, BSU won the game 27–24, and Allen kept his promise. It was Allen's only victory against the Vandals while at BSU.

Shortly after the 1994 championship game, Allen was diagnosed with rhabdomyosarcoma, a rare form of muscle cancer. He returned to coach the Broncos in 1995, but after a recurrence of cancer in December, took a leave of absence and assistant Tom Mason filled in as interim head coach. As the Broncos stumbled to just one win in their first ten games, Allen returned for the final two games of the 1996 season, against New Mexico State and Idaho. His win against NMSU was his first and only Division I-A win. He resigned in December, following a 64–19 loss to Idaho in November, and died three weeks later at the age of 53. Boise State's come-from-behind, trick play-laden victory in the 2007 Fiesta Bowl, which brought even more national attention to the program that Allen helped build, came 10 years to the day after Allen's burial.