Given their severity and non-healing nature, diabetic chronic wounds are a significant concern to the 30.3 million Americans diagnosed with diabetes mellitus (2015). Peripheral arterial diseases, neuropathy, and infection contribute to the development of these wounds, which lead to an increased incidence of lower extremity amputations. Early recognition, debridement, offloading, and controlling infection are imperative for timely treatment. However, wound characterization and treatment are highly subjective and based largely on the experience of the treating clinician. Many wound dressings have been designed to address particular clinical presentations, but a prescriptive method is lacking for identifying the particular state of chronic, non-healing wounds. The authors suggest that recent developments in wound dressings and biosensing may allow for the quantitative, real-time representation of the wound environment, including exudate levels, pathogen concentrations, and tissue regeneration. Development of such sensing capability could enable more strategic, personalized care at the onset of ulceration and limit the infection leading to amputation. This review presents an overview of the pathophysiology of diabetic chronic wounds, a brief summary of biomaterial wound dressing treatment options, and biosensor development for biomarker sensing in the wound environment.