Fennel seed (Foeniculum vulgare Mill.) essential oil (FEO), which is rich in the phytoestrogenic compound trans‐anethole, interacts with oestrogen receptors and influences molecular targets within cells and hormonal responses. This study examined the effect of dietary encapsulated FEO inclusion levels on performance, reproductive hormone profiles, and gene expression in laying hens during the early and late phases. The study was conducted in two independent trials, each involving 210 Atak‐S laying hens that were randomly distributed into 3 experimental groups, each having 10 replicates with 7 hens. The dietary treatments included a basal diet without FEO (Control) and a basal diet supplemented with 175 (FEO175) or 350 mg (FEO350) of encapsulated FEO/kg for 12 weeks. The results showed that FEO350 treatment improved egg production, egg mass, and feed conversion ratio during both early and late phases (p < 0.05). Moreover, increasing FEO inclusion levels enhanced oestradiol, follicle‐stimulating hormone, luteinizing hormone and progesterone concentrations in both early and late laying hens, reaching peak levels at FEO350 (p < 0.05). FEO supplementation upregulated the expression of oestrogen receptor 2 (ESR2) and follicle‐stimulating hormone receptor (FSHR) (p < 0.05). Furthermore, FEO350 increased prolactin receptor (PRLR) expression during the early phase but decreased it during the late laying phase (p < 0.05). Positive correlations were observed between egg production and FSHR, ESR2 and steroidogenic acute regulatory protein (STAR) expression, with a negative correlation for PRLR (p < 0.05). In conclusion, 350 mg FEO/kg was found to be the most effective level for enhancing layer performance.