The urge to implement innovative approaches that align with eco-friendly practices and hold promise for enhancing oral health while promoting environmental sustainability has been increasing. This current work aims to develop a sustainable treatment for oral traumatic ulcers using licorice-based hydrogels (LHGs) containing hydroxyethyl cellulose (HEC) as the green gelling agent. Licorice root aqueous extract was phytochemically profiled using UPLC-ESI-MS/MS. Forty-three compounds were detected, with Glycyrrhizic acid being the major component of the extract (34.85 ± 2.77%). By implementing a Quality by Design (QbD) approach, the study investigates the effects of different licorice extract and HEC concentrations on key variables such as pH and viscosity of the prepared formulations, ulcer and wound healing scores, and tissue growth factors via a Full Factorial Experimental Design. The LHGs exhibited desirable consistency, spreadability, and clarity. Statistical analysis, employing an ANOVA test, revealed the high significance of the constructed models with the licorice concentration being the key independent factor affecting all dependent outputs. The pH as well as the viscosity of the prepared LHGs were positively influenced by licorice extract concentration, with higher concentrations leading to increased alkalinity and viscosity. Rheological behavior analysis revealed a pseudoplastic flow with demonstrated thixotropy which is advantageous for application and prolongation of residence time. The wound healing process was assessed through ulcer size, traumatic ulcer healing score (UHS), collagen-1 expression (COL-1), growth factors (EGF, VEGF), pro-inflammatory markers (TNF-α), wound healing score (WHS). LHGs prepared using higher levels of both factors, 30% dried licorice root extract and 4% HEC, demonstrated enhanced wound healing, elevated growth factor expression of 66.67% and 23.24%, respectively, and 88% reduced inflammation compared to the control group, indicating their potential in expediting oral ulcer recovery. Overall, these findings highlight the promising role of green licorice-based hydrogels in promoting sustainable oral mucosal healing.