Wound or injury is a breakdown in the skin’s protective function as well as damage to the normal tissues. Wound healing is a dynamic and complex phenomenon of replacing injured skin or body tissues. In ancient times the Calendula officinalis and Hibiscus rosa-sinensis flowers were extensively used by the tribal communities as herbal medicine for various complications including wound healing. But loading and delivery of such herbal medicines are challenging because it maintains their molecular structure against temperature, moisture, and other ambient factors. This study has fabricated xanthan gum (XG) hydrogel through a facile process and encapsulated C. officinalis and H. rosa-sinensis flower extract. The resulting hydrogel was characterized by different physical methods like x-ray diffractometer, UV–vis spectroscopy, Fourier transform infrared spectroscopy, SEM, dynamic light scattering, electronkinetic potential in colloidal systems (ZETA) potential, thermogravimetric differential thermal analysis (TGA-DTA), etc. The polyherbal extract was phytochemically screened and observed that flavonoids, alkaloids, terpenoids, tannins, saponins, anthraquinones, glycosides, amino acids, and a few percentages of reducing sugar were present in the polyherbal extract. Polyherbal extract encapsulated XG hydrogel (X@C–H) significantly enhanced the proliferation of fibroblast and keratinocyte cell lines in comparison to the bare excipient treated cells as determined by 3-(4, 5-dimethylthiazol-2-Yl)-2, 5-diphenyltetrazolium bromide assay. Also, the proliferation of these cells was confirmed by BrdU assay and enhanced expression of pAkt. In an in-vivo study, wound healing activity of BALB/c mice was carried out and we observed that X@C–H hydrogel showed significant result compared to the other groups (untreated, X, X@C, X@H). Henceforth, we conclude that this synthesized biocompatible hydrogel could emerge as a promising carrier of more than one herbal excipients.