Mr Allen, 56, has non-Hodgkin’s lymphoma, CNET News and other news sites reported, quoting a letter from his sister, Jody.
“He received the diagnosis early this month and has begun chemotherapy,” Ms Allen said in the letter to employees of her brother’s company, Vulcan.
“Doctors say he has diffuse large B-cell lymphoma, a relatively common form of lymphoma,” said Ms Allen
“Paul is feeling OK and remains upbeat. He continues to work and he has no plans to change his role at Vulcan.”
Mr Allen, who left Microsoft in 1983, was treated for Hodgkin’s disease around 25 years ago and Ms Allen said he was optimistic he could beat again.