Local drug delivery devices offer a promising method for delivering vancomycin and amikacin for musculoskeletal wounds. However, current local delivery devices such as beads and sponges do not necessarily allow for full coverage of a wound surface with eluted antibiotics and do not address the need for reducing the antibiotic diffusion distance to help prevent contamination by bacteria or other microorganisms. We blended chitosan/polyethylene glycol (PEG) pastes/sponges to increase biocompatibility and improve antibiotic coverage within the wound. (1) Are blended chitosan/PEG pastes biodegradable? (2) Are the blended pastes biocompatible? (3) How much force does paste require for placement by injection? (4) Will the pastes elute active antibiotics to inhibit bacteria in vitro? (5) Can the pastes prevent infection in a preclinical model with hardware? Our blended paste/sponge formulations (0.5% acidic, 1% acidic, and acidic/neutral) along with a control neutral 1% chitosan sponge were tested in vitro for degradability, cytocompatibility, injectability tested by determining the amount of force needed to inject the pastes, elution of antibiotics, and activity tested using zone of inhibition studies. Along with these studies, in vivo models for biocompatibility and infection prevention were tested using a rodent model and an infected mouse model with hardware, respectively. By evaluating these characteristics, an improved local drug delivery device can be determined. All three of the paste formulations evaluated were almost fully degraded and with 6 days of degradation, the percent remaining being wasless than that of the control sponge (percent remaining: control 99.251% ± 1.0%; 0.5% acidic 1.6% ± 2.1%, p = 0.002; 1% acidic 1.7% ± 1.6%, p = 0.002; acidic/neutral 2.3% ± 1.7%, p = 0.010). There was good biocompatibility because cell viability in vitro was high (control 100.0 ± 14.3; 0.5% acidic formulation at 79.4 ± 12.6, p < 0.001; 1% acidic formulation at 98.6 ± 6.1, p = 0.993; acidic/neutral formulation at 106.7 ± 12.8, p = 0.543), and in vivo inflammation was moderate (control 2.1 ± 1.2; 0.5% acidic 3.3 ± 0.2, p = 0.530; 1% acidic 2.5 ± 0.9, p = 0.657; acidic/neutral 2.9 ± 1.1, p = 0.784). Force required to inject the 0.5% acidic and 1% acidic pastes was less than the acidic/neutral paste used as a control (control 167.7 ± 85.6; 0.5% acidic 41.3 ± 10.7, p = 0.070; 1% acidic 28.0 ± 7.0, p = 0.940). At 72 hours, all paste formulations exhibited in vitro activity against Staphylococcus aureus (control 2.6 ± 0.8; 0.5% acidic 98.1 ± 33.5, p = 0.002; 1% acidic 87.3 ± 17.2, p = 0.006; acidic/neutral 83.5 ± 14.3, p = 0.010) and Pseudomonas aeruginosa (control 163.0 ± 1.7; 0.5% acidic 85.7 ± 83.6, p = 0.373; 1% acidic 38.0 ± 45.1, p = 0.896; acidic/neutral 129.7 ± 78.0, p = 0.896). Also, the paste formulations were able to prevent the infection with 100% clearance on the implanted hardware and surrounding tissue with the control being a 0.5% acidic paste group without antibiotics (control 4 × 104 ± 4.8 × 104; 0.5% acidic 0.0 ± 0.0, p value: 0.050; 1% acidic 0.0 ± 0.0, p = 0.050; acidic/neutral 0.0 ± 0.0, p = 0.050). The preliminary studies demonstrated promising results for the blended chitosan/PEG pastes with antibiotics provided degradability, biocompatibility, injectability, and infection prevention for musculoskeletal-type wounds. The preliminary studies with the chitosan paste delivered antibiotics to a contaminated musculoskeletal wound with hardware and prevented infection. More studies in a complex musculoskeletal wound and dosage studies are needed for continued development.