Abstract Background Baculoviruses, engineered to express growth factors, offer a promising avenue for short-term gene therapy, such as wound dressings, due to their safety and specificity. Encapsulation in natural polymers like alginate and chitosan addresses limitations like serum inactivation and fragility, while promoting sustained delivery and shielding from immune inactivation. Wound healing involves complex processes that can be enhanced by maintaining an antimicrobial, moist environment, which promotes cell migration and angiogenesis. Vascular endothelial cell growth factor A (VEGFA) is known to be one of the most potent pro-angiogenic factors and plays a key role in wound healing. Purpose This investigation seeks to enhance wound healing and angiogenesis, support the revascularization process, and provide anti-inflammatory and anti-microbial effects. Additionally, it aims to assess the preclinical efficacy and safety of the approach. Methods Ionic cross-linking was used for virus encapsulation under aseptic conditions. The capsules were assessed for their surface morphology, particle size, zeta potential, and in vitro release profile. Additionally, their therapeutic potential was studied using cell lines. The efficacy of hydrogel delivery of VEGFA-expressing baculoviruses in promoting cell migration and angiogenesis for wound healing applications was investigated on Human Umbilical Vein Endothelial Cells (HUVECs). Hydrogel morphology, swelling, and encapsulation efficiency were evaluated, along with endothelial tube formation assays and hemocompatibility studies on HUVECs. Results Encapsulation of baculovirus expressing the VEGFA gene in alginate and chitosan–alginate hydrogels achieve a high encapsulation efficiency of 99.9%. This allows for prolonged virus delivery and an increased therapeutic window. The encapsulated baculovirus maintains activity and is released over eight days, with a transduction efficiency of over 40%. This promotes tube formation, cell proliferation, and cell migration for angiogenesis, particularly beneficial for chronic wound-healing applications. The hydrogels also prevented E. coli and C. albicans growth directly below and inhibited C. albicans growth surrounding the alginate–chitosan hydrogels. The hydrogels demonstrated no cytotoxicity and good blood compatibility. Conclusion This proof of concept underscores the potential of encapsulated baculovirus delivery systems for various gene therapy applications including cardiovascular tissue regeneration and revascularization.