Yes, alley is a Scrabble word!
...and is worth 8 points in Scrabble, and 9 points in Words with Friends
alley
Noun
1. A narrow street with walls on both sides
2. A lane down which a bowling ball is rolled toward pins
What Scrabble words can I make with the letters in alley?
4 Letter Words
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3 Letter Words
2 Letter Words