Allegra Stewart was born in Indianapolis, Indiana on July 26, 1899. A graduate of Shortridge High School, Stewart began her long association with Butler University (BU) as a freshman in 1918 on the Irvington campus. She majored in Greek and philosophy since German, which she had been interested in during high school, had been withdrawn from the curriculum because of World War I. While she was a student, Stewart was also a professional harpist, performing at programs throughout Indianapolis. If more opportunities for women musicians had existed, Stewart said for a 1948 Collegian article, she "would have probably gone on with it." Instead, she earned her A.B. from Butler in 1921 and her M.A. from Columbia University in 1923. She joined the Butler faculty as an English instructor in September 1923, teaching until 1929, at which time she left to attend King's College, University of London. After earning her Ph.D., she returned to Butler in 1933. That same year she founded MSS, Butler’s creative writing magazine. Stewart said it gave "the student a laboratory for English work." Appointed to the Demia Butler Professor of English Chair in 1939, she held the position until her retirement in 1969. Her fields of interest included Milton, Chaucer, Elizabethan drama, Gertrude Stein, and contemporary culture.

In 1967 Harvard University Press published her book, Gertrude Stein and the Present. Even after her retirement, Stewart continued to play an active role at BU. She taught part-time until 1979 and inaugurated Butler's first course on women's literature. She received several honors during her career, among them, students voted her as the outstanding professor for 1963–64. In 1966 she became the first woman to receive the Butler Medal, the highest honor given by Butler alumni. She received an honorary degree of Doctor of Humane Letters from Butler in 1982. Stewart died on February 6, 1994.