Wound healing is an important physiological process involving a series of cellular and molecular developments. A multifunctional hydrogel that prevents infection and promotes wound healing has great significance for wound healing applications in biomedical engineering. We have functionalized arabinoxylan and graphene oxide (GO) using the hydrothermal method, through cross-linking GO-arabinoxylan and polyvinyl alcohol (PVA) with tetraethyl orthosilicate (TEOS) to get multifunctional composite hydrogels. These composite hydrogels were characterized by FTIR, SEM, water contact angle, and mechanical testing to determine structural, morphological, wetting, and mechanical behavior, respectively. Swelling and biodegradation were also conducted in different media. The enhanced antibacterial activities were observed against different bacterial strains (E. coli, S. aureus, and P. aeruginosa); anticancer activities and biocompatibility assays were found effective against U-87 and MC3T3-E1 cell lines due to the synergic effect of hydrogels. In vivo activities were conducted using a mouse full-thickness skin model, and accelerated wound healing was found without any major inflammation within 7 days with improved vascularization. From the results, these composite hydrogels might be potential wound dressing materials for biomedical applications.