Last weekend, as I was putting pine straw in my azalea beds, I noticed some white stuff on a couple of the azalea leaves. At first I thought it was bird poop and kept on. A few minutes later I went back and further inspected the plant because azalea leaf gall crossed my mind. It was indeed a leaf gall. The leaves were swollen and had white mold on them. So I removed those leaves and took a picture before discarding them. After checking the rest of the azaleas I finish placing the pine straw throughout the yard.
Leaf galls, caused by the fungus Exobasidium vaccinii, are common on azalea in the spring during wet, humid, cooler weather. The fungus invades expanding leaf and flower buds causing these tissues to swell and become fleshy, bladder-like galls. Initially, the galls are pale green to pinkish. Eventually, they become covered with a whitish mold-like growth. Fungal spores are produced within the white growth and are spread by water-splashing or wind to other expanding leaf or flower buds, or they adhere to newly formed buds, over-winter, and infect these buds the following spring. Older leaves and flowers are immune to infection. As the galls age, they turn brown and hard. The disease does not cause significant damage to affected plants. It just looks unsightly.
Azalea leaf gall can be prevented in subsequent years by removing the galls by hand as soon as they are detected and destroying them before they turn white and release spores. Fungicides are generally not needed or recommended for control of this disease
Source: Selecting and Growing Azaleas Bulletin 670