Background: Chronic wounds continue to be a global concern that demands substantial resources from the healthcare system. The process of cutaneous wound healing is complex, involving inflammation, blood clotting, angiogenesis, migration and remodeling. In the present study, commercially available alginate wound dressings were loaded with heparin. The purpose of the study was to enhance the angiogenic potential of alginate wound dressings and analyze the antibacterial activity, biocompatibility and other relevant properties. We also aimed to conduct some molecular and gene expression studies to elaborate on the mechanisms through which heparin induces angiogenesis. Methods: The physical properties of the hydrogels were evaluated by Fourier transform infrared spectroscopy (FTIR). Swelling ability was measured by soaking hydrogels in the Phosphate buffer at 37 °C, and cell studies were conducted to evaluate the cytotoxicity and biocompatibility of hydrogels in NIH3T3 (fibroblasts). Real-time PCR was conducted to check the molecular mechanisms of heparin/alginate-induced angiogenesis. The physical properties of the hydrogels were evaluated by Fourier transform infrared spectroscopy (FTIR). Results: FTIR confirmed the formation of heparin-loaded alginate wound dressing and the compatibility of both heparin and alginate. Among all, 10 µg/mL concentration of heparin showed the best antibacterial activity against E. coli. The swelling was considerably increased up to 1500% within 1 h. Alamar Blue assay revealed no cytotoxic effect on NIH3T3. Heparin showed good anti-microbial properties and inhibited the growth of E. coli in zones with a diameter of 18 mm. The expression analysis suggested that heparin probably exerts its pro-angiogenetic effect through VEGF and cPGE. Conclusions: We report that heparin-loaded alginate dressings are not cytotoxic and offer increased angiogenic and anti-bacterial potential. The angiogenesis is apparently taken through the VEGF pathway.