During his 1993 campaign for governor, Allen vowed to reform Virginia's welfare system, stating that "Our obligation as a society is to provide a hand up to those in need, rather than a handout ... Welfare is not to be a permanent status for anyone in life." At the time welfare caseloads climbed 36 percent from 1988 while one out of twelve Virginians were receiving food stamps. In March 1995, after an overwhelmingly bipartisan vote of support, Allen signed his welfare reform bill propelling Virginia ahead of the national welfare reform effort, Among the key provisions outlined in the bill, the Virginia Initiative for Employment Not Welfare (VIEW) limited Temporary Assistance to Needy Families (TANF) benefits for welfare recipients to two years while recipients are required to work within ninety days of receiving benefits. Following VIEW's implementation, welfare caseloads decreased 33 percent, from 73,926 families in March 1995 to 49,609 families in July 1997. In areas where VIEW existed for twelve months, 74 percent were employed versus only 31 percent nationally,. According to the Virginia Department of Health and Human Resource's 1996 annual report, VIEW saved taxpayers 24 million dollar in its first year of existence; with an addition to federal welfare money, the savings total over the following two years comes to just over $70 million

In November 1993, Allen's campaign promise to abolish parole for those convicted of a felony helped drive him to a landslide victory after trailing from a 33 percent point deficit in the polls to Democrat Mary Sue Terry,

Truth-in-sentencing (TIS) and abolition of parole were ultimately passed in a Special Session of the General Assembly with the House voting 89–7 and the Senate voting 34–4 in favor of the measure. On January 1, 1995, Allen's central campaign promise became a reality when TIS and abolition of parole went into effect. According to the law, prison sentences increased for offenders without prior convictions for violent crimes by 125 percent, 300 percent for those with a prior felony conviction that originally had a maximum penalty of less than 40 years, and 500 percent for those with a felony conviction of a violent crime that originally had a minimum penalty of more than 40 years. Between 1994 and 1995, statistics show on average that first degree murders with violent records went from serving 15 years to 46 years.

In June 1995, the Virginia Board of Education adopted Governor Allen's Commission on Champion Schools recommendation for statewide standardized tests for academic accountability. The Board of Education voted in favor of implementing the Standards of Learning (SOLs) which measures student achievements and ensures accountability for schools in the core subjects of English, mathematics, history, economics, and science. The commission also recommended the creation of an annual 'report card' to grade each public school's performance stating that: "If Virginia's youngsters can't make the grade, then neither should their schools" (2)(9). Experts suggested that in order to improve the quality of learning, a school should emphasize academic goals and effective leadership. By using measurement through tests, the state, teachers, and parents can monitor the effectiveness of schools teaching the basic fundamental subjects (1). Allen's legislation used public data of SOLs test scores along with school attendance and drop-out rates to ensure that unsatisfactory schools are accountable by the threat of state takeover through court action.

Allen married Anne Patrice Rubel in June 1979. They divorced in 1983. In 1986, Allen married Susan Brown. The couple has three children. The Allens are residents of Virginia Beach, Virginia.

Allen is a member of the Presbyterian Church. He is fond of using football metaphors, a tendency that has been remarked upon by journalists and political commentators.