There are several signs that indicate an air handler is malfunctioning and may need to be replaced. These signs include reduced airflow, strange noises or vibrations coming from the unit, leaks or moisture around the unit, and frequent breakdowns or repairs. Additionally, a musty or unpleasant odor coming from the unit may indicate mold or bacteria growth. It's recommended to have a licensed HVAC technician inspect the air handler and diagnose the issue to determine if repair or replacement is necessary.