Wound dressing diligently facilitate healing by fostering hemostasis, immunoregulation, the angiogenesis, and collagen deposition. Our methodology entails fabricating chitosan-taurine nanoparticles (CS-Tau) through an ionic gelation method. The morphology of CS-Tau was observed utilizing Transmission electron microscopy (TEM), scanning electron microscopy (SEM) and Dynamic Light Scattering (DLS). The nanoparticles are subsequently incorporated into carboxymethyl chitosan hydrogels for crosslinking by EDC-NHS, yielding hydrogel dressings (CMCS-CS-Tau) designed to extend the duration of taurine release. In vitro investigations confirmed that these innovative compound dressings displayed superior biodegradation, biocompatibility, cytocompatibility, and non-toxicity, in addition to possessing anti-inflammatory properties, and stimulating the proliferation and mobility of human umbilical vein endothelial cells (HUVECs). Experiments conducted on mice models with full-thickness skin removal demonstrated that CMCS-CS-Tau efficaciously aided in wound healing by spurring angiogenesis, and encouraging collagen deposition. CMCS-CS-Tau can also minimize inflammation and promote collagen deposition in chronic diabetic wound. Hence, CMCS-CS-Tau promotes both acute and chronic diabetic wound healing. Furthermore, the sustained release mechanism of CMCS-CS-Tau on taurine reveals promising potential for extending its clinical utility in relation to various biological effects of taurine.