The process of wound healing is a complicated physiological undertaking that includes inflammation, proliferation, and the remodeling of tissue. Oxidative stress, decreased angiogenesis, microbial infection, and reduced collagen synthesis are all factors that contribute to the considerable delay in wound healing that is associated with diabetes mellitus. The use of herbal medicines as alternative therapeutic agents has become more popular due to the fact that they are not only safe but also affordable and have pharmacological action that targets several targets. In the current study, the objective was to create and assess a topical herbal gel formulation for diabetic wound healing that contained extract of Nyctanthes arbor-tristis. The formulation was intended to be used under settings that were mimicked to be used in real life. After collecting, shade drying, powdering, and extracting the leaves of Nyctanthes arbor-tristis with ethanol using the Soxhlet extraction method, the leaves were gathered. In the preliminary screening of phytochemicals, the presence of flavonoids, alkaloids, tannins, glycosides, phenolic compounds, and saponins was established. In order to analyze the physicochemical properties of herbal gel formulations (F1, F2, and F3), Carbopol 934 was used as the gelling agent. The formulations were examined for pH, viscosity, spreadability, extrudability, homogeneity, washability, grittiness, syneresis, drug content, and stability. Over the course of six hours, an in-vitro drug diffusion investigation demonstrated sustained drug release. The F2 formulation had the highest possible drug content (98.4%) and the most regulated drug release pattern of all the formulations. An excision wound model was utilized in diabetic rats for the purpose of conducting pharmacological assessment experiments. At day 0, day 3, day 7, day 10, and day 14, the percentage of wound contraction was measured. A wound contraction rate of 91% was seen in the test group that was treated with herbal gel, in comparison to 63% in the control group and 96% in the conventional medicine group. The safety of the formulation was validated by the skin irritation investigation. As a consequence of the antioxidant, antibacterial, and anti-inflammatory characteristics of phytoconstituents, the findings suggest that the herbal gel made from Nyctanthes arbor-tristis contains substantial wound healing activity. The formulation remained stable in conditions that were approximated to be a real-life usage scenario, which suggests that it is suitable for therapeutic application in the actual world. When it comes to the treatment of diabetic wounds, the herbal gel that was produced has the potential to be a safe, effective, and cost-efficient solution.