Wound healing process significantly impeded by prolonged inflammation responses, infection at the wound site, and insufficient angiogenesis. The sustained release of anti-inflammation and anti-bacterial drugs has the potential to control immune responses, improve angiogenesis, accelerate wound healing, and re-epithelialization. In this research a multifunctional hydrogel containing carboxy methyl cellulose (CMC) and polycaprolactone (PCL), along with Ciprofloxacin (CIP) and Curcumin (Cur) was developed. Physicochemical characteristics as well a biological one such as antibacterial and drug release properties, Collagen deposition, inflammatory responses, angiogenesis, and epidermal regenerated thickness were investigated via in vitro and in vivo assay. The results revealed that the CMC/PCL-based wound dressing has the potential to provide an appropriate level of water absorption (~300 %) to absorb wound exudate and ideal WVTR in range of 2279–2363 g/m2 for wound healing application. Addition of CIP and Cur to CMC/PCL hydrogel improved the skin cell proliferation, cell migration, and antibacterial activity. It also led to superior Collagen I synthesis (~2–4 times), controlled pro-inflammatory and improved anti-inflammatory cytokine secretion of macrophages, and accelerated wound healing in comparison to CMC/PCL hydrogel. In conclusion, the engineered multifunctional hydrogel showed a potential effect for accelerating wound healing and skin regeneration.