Two-time champion Allenby, in one of the early morning groups at Huntingdale, shot a 5-under-par 67 in ideal conditions, then suggested it wouldn't be enough to hold the first-round lead.
'I've hardly ever seen the greens so receptive,' Allenby said. 'I'd say seven or eight under will be what you need today.'
No one improved on the early score posted by Allenby, who took a one-stroke lead over Fredrik Andersson Hed of Sweden and Peter Baker of England on the 6,980-yard Huntingdale course.
'It was definitely there for the taking today,' Allenby said. 'I'd say I left five or six shots out there.'
Six golfers were two strokes back after 69s -- Sweden's Daniel Chopra, Australians Stuart Appleby, Rod Pampling, Kurt Barnes and Paul Marantz and Michael Long of New Zealand.
There was a large group at 2-under 70, including Aaron Baddeley, former U.S. Amateur champion Nick Flanagan, fellow Australians Peter Lonard and Stephen Leaney and Rory McIlroy of Northern Ireland.
McIlroy, 18, turned professional in September after finishing as the top amateur at the British Open.
'It was tough out there,' said McIlroy. 'It got really windy at the end and was pretty hard to control your ball flight. I'm still in the top 15 so I'm pretty happy with how the day went.'
Allenby, starting his round on the 10th, birdied four of his first five holes. But he bogeyed 17 and had two birdies on his last nine for the 67 in cool temperatures and with Huntingdale's usually slick greens slowed by a day of steady rain on Wednesday.
The Masters is the first of four consecutive weeks of tournaments on the Australasian PGA Tour. The Masters and next week's New Zealand Open are co-sanctioned with the European Tour, to be followed by the Australian PGA and the Australian Open.