The original location of Allendale was Timberville, South of the current location. When the railroad was to come through the region, the town was moved to its current location to be on the railroad. This is where the town got the name Allendale, named after a railroad man named Allen. Allendale is home to the First National Bank of Allendale, the oldest bank in the county, and the only bank in the county that survived the Great Depression.
On January 7, 1989, an F4 tornado leveled a good portion of the town of Allendale and injured 55 of its residents. The tornado directly impacted Allendale's school, destroying the grade school portion, built in the 1960s. Ironically, the high school portion, built in the late 1920s, withstood the storm with minimal damage, despite being condemned two years earlier due to lobbying by Mt. Carmel's District 348 in an attempt to usurp District 17. Relief funds paid to build a brand new school to be used by the elementary and middle school students of District 17.