Diabetes mellitus is an increasingly prevalent chronic metabolic disease characterized by prolonged hyperglycemia that leads to long-term health consequences. It is estimated that impaired healing of diabetic wounds affects approximately 25% of all patients with diabetes mellitus, often resulting in lower limb amputation, with subsequent high economic and psychosocial costs. The hyperglycemic environment promotes the formation of biofilms and makes diabetic wounds difficult to treat. In this review, we present updates regarding recent advances in our understanding of the pathophysiology of diabetic wounds focusing on impaired angiogenesis, neuropathy, sub-optimal chronic inflammatory response, barrier disruption, and subsequent polymicrobial infection, followed by current and future treatment strategies designed to tackle the various pathologies associated with diabetic wounds. Given the alarming increase in the prevalence of diabetes, and subsequently diabetic wounds, it is imperative that future treatment strategies target multiple causes of impaired healing in diabetic wounds.