Enlarged, crabapple-like, green or pinkish galls on young leaves and flowers are caused by Exobasidium Leaf and Flower Gall. The galls become hard and turn white and eventually brown. While very noticeable, these galls will not threaten the health of the plant. This problem is more common during cool and wet spring weather. The first symptoms are swollen or puffy portions on newly expanding leaves, shoots, buds or flowers. The galls range in color from green, to pink or red depending on the part of the plant infected. As these galls age they develop a white surface growth which is a layer of reproductive spores. Eventually the infected tissue will turn brown and shrivel up into hard galls. Fungicides seldom provide control. For best control, start spraying in the early spring with Ferbam or Bordeaux. Sanitation and warm dry conditions reduce infestation. It is seldom considered serious. It is most common of evergreen azaleas.

Control. Cultural methods provide the most practical control for azalea gall in many home landscapes:

• Hand remove and discard all galled leaves and yellow or white spotted leaves on rhododendrons before they become white or pink with spores.

• Destroy galls. You can add galled leaves to a hot, properly maintained compost pile.

• Prune overhanging branches to improve air circulation and sunlight penetration.

• Allow adequate space between plants. Prune to keep the landscape open to decrease humidity levels.

• Do not plant extremely susceptible azalea cultivars such as China Seas, Copperman, Herbert, Hinodegiri, Mother’s Day, Rosebud, or White Gumpo. The rhododendron cultivars Purple Splendour and Roseum are also especially susceptible to leaf gall.

• If possible, plant a leaf gall resistant cultivar such as Amoena, Aphrodite, Coral Bells, Eikan, Faker, Formosa, Glacier, Gloria, Hampton Beauty, Kow-Ko-Ku, Mrs. G. G. Gerbing, Nancy, New White, Pride of Summerville, R. Poukhanese, Sensation, Thinbegen, Sunglow, Treasure, or White Jade.

• Place susceptible varieties in locations where they will get maximum exposure to sun and air movement.

• Use protective fungicide spray applications to give some control of leaf gall. Apply Bordeaux mixture or Bayleton just before bud break; apply a second time 2 to 3 weeks later. Follow specific label directions. Add a spreader-sticker to Bayleton to allow for complete spraying coverage.

On thing that exacerbates this problem is pruning an azalea with hedge pruners. This creates a plant with dense growth on the outside and no air circulation. It is an ideal breeding ground for fungal diseases like gall. The proper way to prune is to create a plant that which air can flow through easily. Prune from the inside out, not the outside in. Remove the oldest wood that has the least leaves first. Then when branches cross each other, remove one so they don't rub together. End up with a plant in which air and light can penetrate to the inside.

Here is a link that might be useful: Leaf Gall on Azalea and Camellia