Diabetes Mellitus is a multisystem chronic pandemic, wound inflammation, and healing are still major issues for diabetic patients who may suffer from ulcers, gangrene, and other wounds from uncontrolled chronic hyperglycemia. Marshmallows or Althaea officinalis (A.O.) contain bioactive compounds such as flavonoids and phenolics that support wound healing via antioxidant, anti-inflammatory, and antibacterial properties. Our study aimed to develop a combination of eco-friendly formulations of green synthesis of ZnO-NPs by Althaea officinalis extract and further incorporate them into 2% chitosan (CS) gel. First, develop eco-friendly green Zinc Oxide Nanoparticles (ZnO-NPs) and incorporate them into a 2% chitosan (CS) gel. In-vitro study performed by UV-visible spectrum analysis showed a sharp peak at 390 nm, and Energy-dispersive X-ray (EDX) spectrometry showed a peak of zinc and oxygen. Besides, Fourier transforms infrared (FTIR) was used to qualitatively validate biosynthesized ZnO-NPs, and transmission electron microscope (TEM) showed spherical nanoparticles with mean sizes of 76 nm and Zeta potential +30mV. The antibacterial potential of A.O.-ZnO-NPs-Cs was examined by the diffusion agar method against Gram-positive (Staphylococcus aureus and Bacillus subtilis) and Gram-negative bacteria (Escherichia coli and Pseudomonas aeruginosa). Based on the zone of inhibition and minimal inhibitory indices (MIC). In addition, an in-silico study investigated the binding affinity of A.O. major components to the expected biological targets that may aid wound healing. Althaea Officinalis, A.O-ZnO-NPs group showed reduced downregulation of IL-6, IL-1β, and TNF-α and increased IL-10 levels compared to the control group signaling pathway expression levels confirming the improved anti-inflammatory effect of the self-assembly method. In-vivo study and histopathological analysis revealed the superiority of the nanoparticles in reducing signs of inflammation and wound incision in rat models. These biocompatible green zinc oxide nanoparticles, by using Althaea Officinalis chitosan gel ensure an excellent new therapeutic approach for quickening diabetic wound healing.