Wound healing is a complicated system that necessitates an appropriate environment to aid healing. Wound dressing is among the most important external variables in wound repair. Technology advancements have led to the creation of a variety of dressings that treat various wound types by focusing on the four stages of wound healing. Simplicity of application, sterility, antibacterial, non‐adherent, gaseous exchange, non‐toxicity, and other qualities are necessary for wound dressings. In order to fully regenerate and restore the structure and functionality of the skin, the ideal dressing should address the demands of the wound. So, the kind of wound dressing used is based on the type of injury. This review focuses on the different types of natural polymers such as κ‐carrageenan, chitosan, cellulose, gelatin, collagen, alginate, hyaluronic acid, and silk fibroin used in the development of dressing materials such as hydrogels, nanofibers, sponges, films, and various other types of scaffolds owing to their features, for example, biocompatibility, biodegradability, and similarity to human extracellular matrix (ECM) which aids in the healing process. The commercially available products based on these natural polymers are also discussed in the review. However, the majority of the natural polymer‐based wound dressings still exhibit a number of problems like adherence, opaque, fast degradability, and lack of multifunctionality, thus these need to be addressed. A naturally inspired smart wound dressing is the need of the hour which aids in individual stages of healing by monitoring the multiple wound variables such as pH, temperature, electrical potentials and eases the incorporated drug and biological molecules as per wound healing progress with a variety of delivery systems.