His parents were Albert and Ann Solomon. While still in his teens and a student at Northwestern university he put $750 into the musical Ziegfeld Follies, starring Tallullah Bankhead and thus became the youngest "angel" on Broadway. However the show soon closed. He put $1250 into the play The Happiest Millionaire, starring Walter Pigeon. It was a big hit and Allan Carr became an impresario by the time he was 20.
He was co-creator of the Playboy Penthouse television series. Hugh Hefner subsequently opened his Playboy clubs. Intent on learning about films he went to Madrid in 1961 to work as an assistant to the director Nicholas Ray on King of Kings. He returned to the USA to put on theatre productions in Chicago and Los Angeles. He helped establish the Civic Theater in Chicago where he presented Bette Davis and Gary Merrill in The World of Carl Sandburg.
In 1966 he formed Allan Carr Enterprises which was a talent agency managing Ann-Margret, Melina Mercouri, Peter Sellers, Petula Clarke, Tony Curtis, Herb Alpert and the Tijuana Brass, Dyan Cannon, Paul Anka, Cass Elliot, Marvin Hamlisch, and Peggy Lee. He was credited with discovering Michelle Pfeiffer, Steve Guttenberg, and Mark Hamill.
In 1975 he became a creative consultant to the Robert Stigwood Organisation. In this role he promoted the film of The Who's rock-opera Tommy, directed by Ken Russell. In 1976 he became a millionaire by editing and dubbing a low-budget Mexican film to create Survive!, the surprise film success for Paramont, based on the true story of the Uruguayan soccer team which resorted to cannibalism after their plane crashed in the Andes. In 1978 he produced the film Grease which became one of Hollywood's biggest moneyspinners.
He saw Jean Poiret's hit play La Cage Aux Folles in Paris, but it was not until August 1983 when he was able to get his own musical version on the Broadway stage. He used the composer Jerry Herman, the writer Harvey Fierstein, the director Arthur Laurents, and the choreographer Scott Salmon. The musical was a great success and it won six Tony Awards, including Best Musical, and ran for five years. He co-wrote and produced the film vehicle for the Village People, Can't Stop the Music.
In 1989 he produced the Academy Awards ceremony which came to be regarded as the most vulgar presentation ever. A duet between Robert Lowe and a squeaky-voiced Snow White singing the Ike and Tina Turner song Proud Mary prompted legal action by the Walt Disney company.
In 1995 he sponsored the Royal Shakespeare Company productions in Broadway and Washington D.C. of Cyrano de Bergerac and Much Ado About Nothing which won 10 Tony Awards including one for Allan Carr.
He often dressed in outsize caftans and full-length furs to hide his portly figure. He was nicknamed "Caftans Courageous". At one stage he had his jaws wired up to curb his eating. He was famous for his extravagant parties, the most famous being the black-tie dinner-dance held at Lincoln Heights jail, Los Angeles for the writer Truman Capote. By the end of his life he had homes in Beverly Hills, Malibu, Waikiki, Manhattan, and London. He died of liver cancer at the age of 62.