A teacher by profession, McAllion became a Labour member of Tayside regional council of which he became the convenor in 1986. In the 1987 general election McAllion was elected Labour MP for the Dundee East constituency, defeating SNP leader Gordon Wilson, who was the sitting MP since 1974. McAllion was a member of Scottish Labour Action putting him on the Scottish-nationalist wing of the Labour Party, and also of the Labour Campaign for Socialism, placing him firmly on the left of the party.
As befits a member of the Scottish Labour Action group he strongly favoured home rule for Scotland, and was often outspoken in his defence of civic-minded Scottish nationalism. In 1999 he was elected to the Scottish Parliament to represent Dundee East.
As a MSP he furthered his reputation as a left-winger, rebelling several times against the Labour led Scottish Executive. He was also convenor of the Scottish Parliament's Petitions Committee. In 2000 he helped establish the Scottish Left Review publication.
At the 2003 parliament election he lost his seat to Shona Robison, the SNP candidate. The Scottish Socialist Party (SSP) pulled out of contesting the seat in favour of McAllion, but ironically this may have assisted his defeat.
Since the election deafeat McAllion has found work with Oxfam and has also resigned his membership of the Labour Party. There has been much speculation that he may join the SSP.