This study was carried out to evaluate the effect of in ovo injection of different L-arginine (LA) levels (0, 1, 2 and 3%) at day 7 of incubation period on hatchability (%) and some  physiological traits of Inshas local breed chickens .  Fertile eggs (n=500) from Inshas  laying hens were divided into 5 groups (100 eggs in each treatment group) as follow: the first and the second groups were the negative control non- injected group (G1) and the positive control (injected with saline solution) groups (G2); while the 3^rd , 4^th and 5^th groups were injected in ovo with different L-arginine (LA) levels (1, 2 and 3%). The criteria of response were on hatchability, blood hematology and biochemical traits, as well as histological changes in duodenum, in terms of  villi height, width and surface area. Results revealed a significant (P<0.05) increase of hatchability rate in treated groups (G3, G4 and G5) than the control groups (G1 and G2). However, G3   group has   was  significantly (P<0.05) the lowest in percentage of hatchability (82.8 %) than in G5 (86.6%), but no significant differences between G4 and G3 and G5 were recorded. The  mean values of residual Yolk % and liver (g), were significantly (P<0.05) higher in treated groups G5, G4 and G3 than in control  groups. In ovo injection with L-arginine, resulted in a significant (P<0.05)  increase in hemoglobin, total white and red blood cells count in treatment groups than control groups. Moreover, PCV (%) and Heterophils (%) were significantly higher in groups G4 and G5 than in groups G1 and G2 but no significant difference among G3 and other groups. On the other hand, lymphocytes % was not significantly affected by in ovo injection with L-arginine among groups.Chicks produced from eggs injected with L-arginine in groups G4 and G5 showed significant increases (P>0.05) in serum glucose and protein concentrations than in other groups and significant decreases (P>0.05) in serum cholesterol, total lipids and triglycerides concentrations compared with G3 and controls. Average of villus length and surface area were significantly higher in groups 5 and 4 than in G3, G2 and G1 groups, respectively. While, duodenum villus width was significantly higher in groups 5, 4 and 3 than in groups 2 and 1. Conclusion: It can be concluded that the in ovo injection of L-arginine the 7^th d of incubation would improve hatchability percentage rate, some organ weights, carcass traits and certain blood serum characteristics and hematology, as well as, villus length, width and surface area.