Polymeric materials have been essential biomaterials to develop hydrogels as wound dressings for sustained drug delivery and chronic wound healing. The microenvironment for wound healing is created by biocompatibility, bioactivity, and physicochemical behavior. Moreover, a bacterial infection often causes the healing process. The bacterial cellulose (BC) was functionalized using graphene oxide (GO) by hydrothermal method to have bacterial cellulose-functionalized-Graphene oxide (BC-f-GO). A simple blending method was used to crosslink BC-f-GO with polyvinyl alcohol (PVA) by tetraethyl orthosilicate (TEOS) as a crosslinker. The structural, morphological, wetting, and mechanical tests were conducted using Fourier-transform infrared spectroscopy (FTIR), Scanning electron microscope (SEM), water contact angle, and a Universal testing machine (UTM). The release of Silver-sulphadiazine and drug release kinetics were studied at various pH levels and using different mathematical models (zero-order, first-order, Higuchi, Hixson, Korsmeyer–Peppas, and Baker–Lonsdale). The antibacterial properties were conducted against Gram-positive and Gram-negative severe infection-causing pathogens. These composite hydrogels presented potential anticancer activities against the U87 cell line by an increased GO amount. The result findings show that these composite hydrogels have physical-mechanical and inherent antimicrobial properties and controlled drug release, making them an ideal approach for skin wound healing. As a result, these hydrogels were discovered to be an ideal biomaterial for skin wound healing.