On November 4, 2007, Allen passed 17,000 points for his career with his first of two 3-pointers in overtime in a 98–95 victory against the Toronto Raptors, in which he sank the game winning 3-pointer with three seconds remaining in overtime.
On February 13, 2008, Allen was named as the replacement for injured East All-Star Caron Butler of the Washington Wizards, who was out with a left hip flexor strain, for the 2008 NBA All-Star Game in New Orleans.
On April 19, 2006, Allen broke Dennis Scott's ten-year-old NBA record for 3-point field goals made in a season in a game against the Denver Nuggets. On January 12, 2007, Allen scored a career-high 54 points against the Utah Jazz in a 122–114 overtime win, the second most in Sonics history.
Shortly after, he had ankle surgery on both ankles and missed the remainder of the 2006–07 season.
The Celtics had defeated the #8 seeded Atlanta Hawks 4–3 and then defeated the #4 seeded Cleveland Cavaliers 4–3 as well.
They advanced to the 2008 NBA Finals after a 4–2 Conference Finals series win over the Detroit Pistons.
Allen remained with the Bucks midway through the 2002–03 season, when he was dealt to the Sonics, along with Ronald Murray, former UConn teammate Kevin Ollie, and a conditional first round draft pick, in exchange for Gary Payton and Desmond Mason.