Background: Diabetic wound (DW) is the most devastating complication resulting in significant mortality and morbidity in diabetic patients. The objective of the current study was to formulate Epidermal Growth Factor loaded Chitosan nanoparticle impregnated with thermos-responsive injectable hydrogel with protease inhibitor. EGF, shown in all stages of wound healing from inflammation to proliferation and remodelling, combined with Doxycycline, a well-known anti-inflammatory and anti-bacterial drug, could be a better strategy in diabetic wound healing. However, EGF’s low stability makes it difficult to use. Methodology: The nanoparticles were prepared using the ionic gelation method. The prepared nanoparticles were evaluated for particle size, zeta potential, entrapment efficiency, and SEM studies. Further, the optimized nanoparticle batch was loaded into hydrogel with a protease inhibitor. The hydrogel was evaluated for morphology, protease degradation, in vitro drug release, anti-bacterial activity, cell migration, in vitro cell biocompatibility, and in vivo wound healing studies. Results and Conclusion: The particle size analysis of nanoparticles revealed the size (203 ± 1.236 nm), Zeta potential (+28.5 ± 1.0 mV), and entrapment efficiency of 83.430 ± 1.8%, respectively. The hydrogel showed good porous morphology, injectability, thermo-responsive, biocompatibility, and controlled drug release. In vitro anti-bacterial studies revealed the potential anti-bacterial activity of doxycycline against various microbes. In vivo data indicated that combining EGF and DOX considerably reduced inflammation time-dependent than single-agent treatment. Furthermore, histological studies corroborated these findings. After topical application of hydrogel, histopathology studies revealed significant collagen synthesis and a fully regenerated epithelial layer and advancement in all three stages (proliferation, remodelling, and maturation), which are required to improve the diabetic wound healing process by any dressing. These findings demonstrated that hydrogel promoted cutaneous wound healing in STZ-induced rats by suppressing inflammation at the wound site. Furthermore, histological studies corroborated these findings. After topical application of hydrogel, histopathology studies revealed significant collagen synthesis, a fully regenerated epithelial layer, and advancement in all three stages (proliferation, remodelling, and maturation), which are required to improve the diabetic wound healing process by any dressing. These findings demonstrated that hydrogel promoted cutaneous wound healing in STZ-induced rats by suppressing inflammation at the wound site.