Deformed fruit and early fruit drop are classic symptoms of an apple maggot infestation. If you slice open one of those apples, you'd see the brown tracks left by the maggots. Maggots are the larval development phase of a small fly that lays its eggs in the apple around the end of June or the first of July. If you choose to use a chemical approach to this problem, you should spray your tree with an insecticide labeled for apple maggot, starting July 1 and every 10 days thereafter until just before harvest.
As with any pesticide, read the label and follow the directions carefully.
There are less toxic, more environmentally friendly approaches to this problem. For a single tree, you can try bagging your apples. See the following publication:
Apple Maggot Management in Home Gardens
FAQ #15230
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The fruit on my apple tree falls off just as it starts to grow. Apples that do grow are deformed.
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