Wound dressings are always needed after skin injury; however, most of the dressings still leave room for improvement. Here, we would like to develop an effective dressing with the ability to improve wound healing. A chitosan-Vaseline gauze (CVG) dressing was developed by coating the chitosan mixture and Vaseline on sterile gauze with subsequent drying. Infrared spectroscopy and electron microscopy were used to investigate the miscibility and structure of the dressing. The cytotoxicity and antibacterial nature were evaluated in vitro. The studies of water retention rate, wound healing, and tissue compatibility were carried out over a period of 14 days on full-thickness skin wounds of male Sprague-Dawley rats. It was observed that the CVG dressing demonstrated functional structure by miscibility, non-cytotoxicity, and good antibacterial effects against both Gram-positive and Gram-negative bacteria. The water retention rate incresased up to 25% after applying CVG for 3 hours. Besides, CVG treatment increased angiogenesis and improved microvascular density in wounds. The wounds treated with CVG showed size deduction with new collagen aggregations similar to those in the normal dermis. All the aforementioned results suggest that CVG dressing could be a promising candidate for wound treatment.