Wound healing is a complex biological process impaired by several factors, and conventional treatments often result in undesirable side effects. Natural compounds have emerged as favourable alternatives due to their reduced side effects. C-phycocyanin (C-Pc), a natural phycobiliprotein derived from Spirulina platensis, shows promise in wound healing but is hindered by poor stability and low bioavailability. This study aimed to develop a hydrogel-based delivery system for C-Pc to enhance its stability and therapeutic efficacy in wound healing. We synthesized a grafted gum hydrogel to encapsulate C-Pc, ensuring its sustained release. The hydrogel’s physical properties, including clarity, pH, spreadability, and rheological behaviour, were characterized. The encapsulation efficiency, in vitro release profile, antioxidant activity, and adhesion were assessed. Furthermore, the hydrogel’s impact on wound healing was evaluated through in vivo studies and assessments of skin irritation potential. The optimized hydrogel demonstrated excellent physical stability, appropriate viscosity, and significant bioadhesive properties, making it suitable for topical application. The encapsulated C-Pc exhibited a controlled release, enhanced antioxidant activity, and greater wound-healing efficacy than free C-Pc. In vivo studies confirmed accelerated wound closure with no irritation or allergy, suggesting high biocompatibility and therapeutic potential. Developing a C-Pc encapsulated hydrogel presents a promising approach to improving wound care. This innovative approach not only stabilizes C-Pc but also enhances its healing properties, providing a safe and effective option for patients. This study paves the way for a novel formulation with translatory potential.