Horatio Allen was born in 1802 in Schenectady, New York. Allen began his career as resident engineer on the Chesapeake and Delaware Canal in 1824, but two years later moved to the Delaware and Hudson Canal, where he learned about the importance of railroading and made the acquaintance of John B. Jervis. Jervis and Allen planned and supervised construction of a sixteen-mile railroad extension to the canal, allowing traffic to move beyond navigable regions. Jervis then sent Allen to England to purchase engines for this new line in 1828.

In England, Horatio Allen met with Robert Stephenson, a pioneer engine builder, from whom he purchased a locomotive – the Stourbridge Lion. It was sent onto the canal head in Pennsylvania and on August 9, 1829 Allen took it for a test run. Unfortunately, due to its weight, the locomotive proved too heavy for the rails and could only be used as a stationary engine for pulling cars up inclines.
Later that year, Allen became chief engineer to the company building the Charleston and Hamburg line in South Carolina. This line connected the hinterland of the Palmetto state with the coast, terminating across the Savannah River from Augusta, Georgia. Drawing on his expertise and experience, he convinced the directors of the company to use steam engines rather than horses to pull their trains and purchased the first locomotive built in the United States. This engine, The Best Friend of Charleston, pulled the first regularly scheduled passenger train to run in the Americas on 25 December 1830. For the next four years Allen assiduously improved his locomotive design, working with Jarvis in the creation of a bogie truck to guide engines around curves and eliminate bumpy riding. Allen also used a fire-car for nocturnal runs, enabling the Charleston and Hamburg to operate after dark.

Later, Allen settled permanently in New York City to work as a consulting engineer. He contributed to the construction of the Erie Railroad, and to the design of aqueducts and bridges. In 1842 he became president of the Novelty Iron Works, a position he held until retirement in 1870. Allen continued to work as a consulting engineer on projects as diverse as the Brooklyn Bridge and the Panama Railroad. He died in 1889 in Orange, NJ.