In the present study, cyclic β-(1→3) (1→6)glucan/carrageenan hydrogels (CBG/Car) were prepared and their in vivo wound healing potential in rats and their ability to encapsulate a hydrophobic drug, ciprofloxacin, were studied. CBG increased the porosity of the hydrogels and hence enhanced the cell attachment and proliferation. It also enhanced drug loading, aided sustained release and exhibited good antibacterial activity. The presence of CBG in the hydrogel enhanced the wound healing ability both in vitro in cells as well as in vivo in rats. Full-thickness excision wounds in rats treated with the hydrogel healed faster when compared to the control. These results as well as the inherent immunomodulating properties of CBG suggest that the CBG/Car hydrogels have the potential to be developed as a novel wound dressing material. © 2016 Royal Society of Chemistry.