Quercetin (QCT) is an effective antioxidant, antifibrotic and wound healing agent. Silver nanoparticles (AgNPs) are an effective antimicrobial, antifungal and wound healing agent and considered as gold standard for wound treatment especially diabetic and burn wounds. The present study aimed to investigate QCT loaded AgNPs in hydrogel matrices (QCT-AgNPs hydrogel) as synergistic treatment paradigms for diabetic wound. Quality by Design approach was employed for the optimization of hydrogel preparation using carbopol-934 and al oe vera. The developed QCT-AgNPs hydrogel was characterized for hydrodynamic diameter, %entrapment efficiency (%EE), surface morphology, texture analysis, in-vitro drug release, skin irritation study, ex-vivo permeation study (confocal study), and antimicrobial efficacy. The optimized formulation showed hydrodynamic diameter of ∼44.1 nm with smooth spherical surface morphology and ∼92.09% of QCT was entrapped in QCT-AgNPs hydrogel matrices. The antimicrobial study revealed superior therapeutic efficacy of QCT-AgNPs hydrogel in comparison to marketed (MRKT) gel on S. aureus and E. coli . Moreover, in-vivo results demonstrated that QCT-AgNPs hydrogel significantly ( p < 0.001) reduced the wound gap and increased % re-epithelialization compared with diabetic control after 18 d of post treatment in excisional diabetic wound model. In conclusion, this study opens up an avenue for the treatment of diabetic wound.