This study was carried out to assess the effects of different levels of sanguinarine on antioxidant indices, immunological responses, serum biochemical parameters, ileal microbial counts and jejunal morphology of laying hens fed on diets with different levels of crude protein (CP). A total of 180 laying hens were subjected into nine dietary treatments with four cages of five birds each. Experimental treatments consisted of three levels of CP (85.0, 92.5 and 100% of Hy-Line W36 manual recommendation) and three levels of sanguinarine (0.00, 3.75 and 7.50 mg/kg) as a 3 × 3 factorial arrangement of laying hens which fed during a 70-day feeding trial. The in vitro study showed that sanguinarine exhibited sevenfold and threefold decreased antioxidant activities to inhibit 2-2-diphenyl-1-picric hydrazyl free radical as well as ferric ion reducing rather than butylated hydroxyl toluene. Although using the decremental levels of CP caused the increase in heterophil-to-lymphocyte ratio (p < 0.01), dietary administration of sanguinarine could suppress the serum cholesterol and malondialdehyde concentrations as well as heterophil-to-lymphocyte ratio (p < 0.05). Additionally, decreasing CP content resulted in the decreased percentage of albumin (p < 0.05); however, it had no negative effects on humoral immunity. Nonetheless, feeding of at least 3.75 mg/kg sanguinarine led to the remarkable increases in serum gamma globulin concentration (p < 0.01) and secondary (p < 0.05) antibody titres against sheep red blood cells. Moreover, a decline in dietary CP content led to higher villi height and crypt depth (p < 0.05; p < 0.001) and consequently decreased villi height-to-crypt depth ratio (p < 0.001) than the optimum level (100% CP). In spite of the effects of sanguinarine on the suppression of Escherichia coli and Salmonella counts (p < 0.05), it markedly enhanced villi height-to-crypt depth ratio as well as lamina propria lymphatic follicles extent, simultaneously (p < 0.001). Therefore, in spite of the detrimental effects of feeding low-CP diets on lymphocytes and serum albumin percentages, and villi height-to-crypt depth ratio, the administration of incremental levels of sanguinarine could improve cellular and humoral immunity, decrease ileal microbial counts and in turn improve the intestinal health indices in laying hens.