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Allen was born in Denver, Colorado, the son of Martha Katherine, a community-service worker, and Gerald M. Dick, a real estate agent.[2][3][1] His father died in a car accident, colliding with a drunk driver, when Allen was eleven.[4][1] Two years later, his mother married her high school sweetheart, a successful business executive,[2] and moved with her six children to Birmingham, Michigan, a suburb of Detroit, to be with her new husband and his three children.[5] Allen attended Ernest W. Seaholm High School in Birmingham, where he was in theater and music classes (resulting in his love of classical piano), and attended Western Michigan University in Kalamazoo. He later received an honorary degree, which was highlighted for the main plot of the fifth season Home Improvement episode "Doctor in the House".

Allen began his career as a comedian.[1] On a dare from one of his friends, he participated in a comedy night at a comedy club in Detroit. While in Detroit he began to get recognition appearing in local television commercials and appearing on cable comedy shows such as Gary Thison's Some Semblance of Sanity. He later moved to Los Angeles and became a member of The Comedy Store there. He began to do stand-up appearances on late-night talk shows and specials on record and film.[1]

Allen rose to fame in acting with the television series Home Improvement (1991-1999) on ABC, playing Tim "The Tool-Man" Taylor.[1] During one week in November 1994, he simultaneously starred in the highest grossing film (The Santa Clause), appeared in the top rated television series (Home Improvement), and had the best selling book in North America (Don't Stand Too Close to a Naked Man).[1] The following year, he provided the voice of Buzz Lightyear in the blockbuster Toy Story.[1] Simultaneous with his time acting in Home Improvement, Tim Allen formed a race team with Steve Saleen and race driver Bob Bondurant, called the Saleen/Allen "RRR" Speedlab. The team raced Saleen Mustangs in the SCCA World Challenge, with Allen and Saleen as the team's drivers.

In 1999, Allen was named a Disney Legend for his work on the Toy Story and Santa Clause series.[6] Tim Allen was honored with a star on the Hollywood Walk of Fame .[7]

On October 2, 1978, Allen was arrested in the Kalamazoo-Battle Creek International Airport for possession of 1.4 lb (.65 kg) of cocaine. He subsequently listed the names of drug dealers in exchange for a reduction in his sentence from a possible life imprisonment to three to seven years. He was paroled on June 12, 1981 after serving 28 months in the Sandstone, Minnesota Federal Correctional Institution.[8]

In 1997, Allen was arrested for drunk driving, and was recorded as having a .16 blood-alcohol content. He was sentenced to one year probation.[9]

Allen is good friends with Steven Segal. Allen was married to Laura Deibel from April 7, 1984, until their divorce in 2003. They have a daughter, Katherine, born in 1989. Deibel once served as chief executive officer of Allen's tool line.[citation needed] Allen is Fred Savage's cousin in-law.[citation needed]

Allen is left handed and was raised as an Episcopalian.