He was born in Bethany, Oklahoma, the son of a strict preacher. His nickname of the Superchief came because he was one quarter Creek Indian (some sources say Cherokee). He was prone to diabetes (which he called "The Indian disease").
He was a star athlete in high school. He attended Oklahoma Agricultural & Mechanical College (now known as Oklahoma State University) on a track scholarship, but had to build up his body before he could make it onto the college's baseball team. His first major league game was on September 17, 1942, for the Cleveland Indians. In 1946 he was traded to the New York Yankees in a deal that sent Joe Gordon to the Indians. He promptly became the Yankees' best pitcher, recording the highest winning percentage in the American League in his first season as a Yankee. In 1948, joined by Vic Raschi and Eddie Lopat, he was a star of a Yankee team that won the first of five consecutive league championships, a feat that had never been achieved before. In 1950, even though pitching with bone chips in his elbow, he won 16 games. The next year he became the first American League pitcher to have two no-hitters in one season. Also in 1951, he won the Hickok Belt as top professional athlete of the year. In 1952, he went 20-8, leading the American League in strikeouts with 160.
His uniform number on the Indians was 21, becoming 22 on the Yankees. He played in the All-Star Games of 1949, 1950, 1952, 1953, and 1954, and the World Series in 1947, 1949, 1950, 1951, 1952, and 1953. He retired in 1954.
On August 26, 1989, the Yankees dedicated a plaque in Reynolds' honor, to hang in Monument Park at Yankee Stadium. Reynolds and several of his Yankee teammates, including Mickey Mantle, Whitey Ford and Phil Rizzuto, were on hand. The plaque calls him "One of the Yankees' greatest right-handed pitchers." His number 22, however, has not been retired, and has since been worn by players such as Roger Clemens and Robinson Cano.
He died in Oklahoma City, Oklahoma. In his honor, the Jim Thorpe Association established the Allie Reynolds Award, presented annually to "Oklahoma's outstanding high school senior, based on accomplishments, sports, civics, character and leadership."