Hydrogel membrane dressings with multifunctional tunable properties encompassing biocompatibility, anti-bacterial, oxygen permeability, and adequate mechanical strength are highly preferred for wound healing. The present study aimed to develop biopolymer-based hydrogel membranes for the controlled release of therapeutic agent at the wound site. Toward this end we developed Cefotaxime sodium (CTX) loaded keratin (KR)-pullulan (PL) based hydrogel membrane dressings. All membranes show optimized vapor transmission rate (≥1000 g/ m²/day), oxygen permeability >8.2 mg/mL, MTT confirmed good biocompatibility and sufficient tensile strength (17.53 ± 1.9) for being used as a wound dressing. Nonetheless, KR-PL-PVA membranes show controlled CTX release due to enriched hydrophilic moieties which protect the wound from getting infected. In vivo results depict that CTX-KR-PL-PVA membrane group shows a rapid wound closure rate (p < 0.05) with appreciable angiogenesis, accelerated re-epithelization, and excessive collagen deposition at the wound site. These results endorsed that CTX-KR-PL-PVA hydrogel membranes are potential candidates for being used as dressing material in the diabetic wound.