The 58-year-old actress had just collected her award for Best Supporting Actress in I,Tonya when she was stunned to see the royal couple staring back at her.
Allison confessed that she wanted to “say hello”, but feared going against royal protocol or saying the wrong thing.
Speaking exclusively to press including Express.co.uk, Allison explained: “I got hit by a wave of joy and emotion and pride.
“It was extraordinary. Then having Kate and William right there in the front row.
“I was just looking at them. I couldn’t even… I didn’t know whether I should say hello or anything to them.
“And then I looked at them and thought, ‘No! You’re going to say something wrong. You don’t say Kate and William. You say Regina’. So whatever.”
She continued: “I decided to just look at them, smile and just stare.”
It had been reported earlier this month that letters had been sent out requesting that guests at this year’s event wore black to show solidarity with the Time’s Up movement.
Kate was seen to wear a green dress this evening, as royals only wear black when in mourning and are also exempt from making political statements.
Allison spoke out about Kate’s choice not to wear black, adding that the royal could wear “whatever she liked”.
The film star said: “I would never judge anyone’s choice of what they’re wearing.
“She looked absolutely beautiful, and I’m so happy for them and that she’s pregnant again.
“I think she’s an extraordinary woman.
“She can wear whatever she wants to wear!”
The BAFTAS 2018 is available to watch on the BBC iPlayer now.