Background: Antibiotic resistance is a significant public health concern around the globe.Antimicrobial peptides exhibit broad-spectrum and efficient antibacterial activity with an added advantage of low drug resistance. The higher water content and 3D network structure of the hydrogels are beneficial for maintaining antimicrobial peptide activity and help to prevent degradation. The antimicrobial peptide released from hydrogels also hasten the local wound healing by promoting epithelial tissue regeneration and granulation tissue formation. Objective: This study aimed at developing sodium alginate based hydrogel loaded with a novel antimicrobial peptide Chol-37(F34-R) and to investigate the characteristics in vitro and in vivo as an alternative antibacterial wound dressing to treat infectious wounds. Methods: Hydrogels were developed and optimized by varying the concentrations of crosslinkers and subjected to various characterization tests like cross-sectional morphology, swelling index, percent water contents, water retention ratio, drug release and antibacterial activity in vitro, and Pseudomonas aeruginosa infected wound mice model in vivo. Results: The results indicated that the hydrogel C proved superior in terms of cross-sectional morphology having uniformly sized interconnected pores, a good swelling index, with the capacity to retain a higher quantity of water. Furthermore, the optimized hydrogel has been found to exert a significant antimicrobial activity against bacteria and was also found to prevent bacterial infiltration into the wound site due to forming an impermeable barrier between the wound bed and external environment. The optimized hydrogel was found to significantly hasten skin regeneration in animal models when compared to other treatments in addition to strong inhibitory effect on the release of pro-inflammatory cytokines (interleukin-1β and tumor necrosis factor-α). Conclusions Our results suggest that sodium alginate -based hydrogels loaded with Chol-37(F34-R) hold the potential to be used as an alternative to conventional antibiotics in treating infectious skin wounds.