Skin injuries have long been recognized as a prevalent type of physical injury. As a result, numerous research studies have been performed to discover an effective mechanism for wound healing. Therefore, tissue engineering of skin has developed as a potential solution for traditional methods of treating skin injuries. Alginate/Chitosan hydrogel was mixed with 1, 10, 100, and 150µM Obestatin, and evaluated the morphology, cumulative release, hemocompatibility and cytocompatibility, water absorption, cell viability, weight loss, and antibacterial characteristics of three-dimensional (3D) alginate (Alg) and chitosan (Cs) hydrogels during the process of wound curing. Various concentrations of Obestatin (Obes) were utilized for this purpose. Finally, the hydrogels that were made were tested on a full-thickness dermal wound in a Wistar rat model. The curative effects were determined by analyzing RNA expression and examining tissue stained with Masson's trichrome (MT) and hematoxylin-eosin (H&E). The biodegradability of this hydrogel was verified using weight loss testing, which demonstrated a reduction of around 90% after a period of 3 days. Furthermore, the MTT assay demonstrated that hydrogels have a beneficial effect on cell proliferation without inducing any harmful effects. Furthermore, the hydrogels produced demonstrated higher wound closure in vivo compared to the wounds treated with gauze (negative control group). Among the hydrogel groups, the chitosan/alginate/obestatin 100µM group exhibited the apical percentage of wound closure, gene expression, and secondary epithelialization, but in 150µM concentrations, we saw a lower rate of cell growth and proliferation and increase in hemolysis. In addition, RT-PCR analysis demonstrated that a concentration of 100µM obestatin resulted in an upregulation in the expression of mRNA for vascular endothelial growth factor (VEGF), collagen type I & type III, and transforming growth factor-beta (TGF-β). The present study suggests that 3D Alg/Cs hydrogels with a concentration of 100µM obestatin have the potential for clinical application in the treatment of skin injuries.