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His mother remarried about two years later, and the family moved to the Detroit suburbs, where Allen struggled through high school and barely made it to college. He graduated from Western Michigan University with a degree in TV production, but not long after, got caught up in drugs. He fell in with a fast, hard-partying crowd, started selling cocaine, and in 1979 was arrested and later sentenced to eight years in a minimum-security federal penitentiary in Minnesota.
Allen served just over two years there, and it was a transforming experience. He occupied himself by reading books and writing letters, and slowly faced the realization that he had screwed up his life. "It was frightening, that whole time, how much anger I had," he says. "Then the anger was directed toward me, so I had to take the blame for this whole situation I put myself into." A supportive family helped him through the ordeal. "Tim accepted it," says his mother. "He knew he deserved it, and he didn't fight it. Everyone in the family came out and rallied behind him."
Allen found humor useful in prison. He made the meanest guards laugh by putting pictures of Richard Nixon in the peephole of his cell when they made their rounds. Later he staged comedy shows for the other inmates. Once, while riding a bus to another prison, he managed to slip out of his handcuffs. The only thing he could think to do was bum a cigarette off the old bank robber sitting in front of him. "I reached into his shirt pocket with the handcuff on one hand, and then tapped him on his other shoulder to get a match. He said, 'What's going on?' and I told him I got my handcuffs off and was getting ready to break out. Of course, I still had shackles on my legs and everywhere else. But just that one moment, when I asked the guy for a match, was what I lived for -- the expression on his face."
Returning to Detroit after his parole, Allen went to work in advertising while trying to develop a stand-up comedy act at night. Mark Ridley, owner of the Comedy Castle, remembers how Allen, dressed in coat and tie, stood out from the usual crowd of overage class clowns even in his first appearance. "He was a bundle of nerves," says Ridley, "shaking his hands and pacing himself into a frenzy. But boom, once he was up there, he was in control." His early material, Allen recalls, was full of sexual and scatological references: "It was like turning your guitar up real loud." Eventually he hit on the macho-tool-guy persona that became his trademark. "What really interested me was garages and tools and all that I call 'men's stuff.' The more I started talking about it, the more I would get men to stand up and listen to my comedy. And then women would go, 'He's like that,' and it started getting couples to enjoy the show."