A rapid drop in egg production and a high culling rate in hens are associated with using four avian influenza (AI) inactivated vaccines. Average formalin levels in 22 batches of commercial AI vaccines are 0.34%, 0.59%, 0.79%, and 0.33%, respectively, in H5N1 Re-1, Re-4, Re-1 Re-4, and Re-1 H9N2 vaccines. Laying production rate dropped from the expected 96.1% to 68.3%, 62.6%, and 54.1%, respectively, in hens that received H5N1 Re-1 strain, Re-4 strain, or Re-1 Re-4 strain vaccines, and the culling rate was 8.8%, 15.0%, and 18.0%, respectively. AI vaccines containing 0.66%–0.81% formalin could significantly induce lower estradiol levels and decreased antibody titers of H5 subtype in a field study. In an experimental study, 200 16-wk-old laying hens were randomly divided into four groups and intramuscularly injected 0.5 ml per chicken formalin-oil preparation at the dose of 0.10%, 0.40%, and 0.81% formalin, respectively. The control hens were given 0.5 ml phosphate buffered saline. Egg performance and degenerative combs were examined daily. The results showed that 0.81% formalin preparation significantly induced an egg production drop and lower estradiol levels as compared to the lower formalin preparations. Significant degeneration of combs and ovarian follicles was also observed. These changes suggest that vaccines with more than the recommended formalin concentration lower hemaglutination inhibition antibody levels and induce an imbalance in estradiol secretion, resulting in degenerative change in ovarian follicles and uterus. Hence, new H5N1 vaccines with recommended formalin levels are urgently needed.