Developing novel approaches for the treatment of fabric to inherit antibacterial properties is pursued with great interest considering the growing demand, intermittently creeping pandemic situations, and increased awareness of clean, healthy, and hygienic lifestyles. Herein, in the present work, we have developed bio-mediated zinc oxide nanoparticles (ZnO NPs) by treating Azadirachta indica (Neem) leaf extract with zinc acetate. Further, the ZnO NPs were coated on the cotton fabric using an environmentally friendly ultrasound-assisted coating method without the aid of binders. The as-synthesized ZnO NPs and ZnO-coated cotton fabric were investigated using XRD, FTIR, ATR-FTIR, SEM-EDAX, and TGA analysis. The antibacterial activity, wound healing, mechanical and wash durability properties of ZnO-coated cotton fabrics were also investigated. The results demonstrate that the ZnO-coated fabric exhibits significantly better antibacterial against E. coli and S. aureus bacteria. In addition, the in-vivo studies revealed that ZnO NPs coated cotton shows faster wound healing than the control. Moreover, the coated fabric shows good adherence of ZnO NPs owing to the chemical bonding between NPs and cotton fabric. This chemical bonding gives good washing durability for up to 20 washing cycles. These findings suggest the potential of ZnO-coated antibacterial wound dressings for biomedical and healthcare applications.