A Semi Interpenetrating Polymer Network (semi-IPN) hydrogel was prepared and loaded with an antibiotic drug, gentamicin, to investigate the wound healing activity of this system. The semi-IPN hydrogel was synthesized by combining natural polymer cellulose nanocrystal (CNC) and synthetic polymer polyethylene glycol (PEG) and poly (N,N′-dimethyl acrylamide) (PDMAA), which was initially added as a monomer dimethyl acrylamide (DMAA). CNC was prepared from locally obtained jute fibers, dispersed in a PEG-NaOH solvent system and then mixed with monomer DMAA, where polymerization was initiated by an initiator potassium persulphate (KPS) and cross-linked by N,N′-methylenebisacrylamide (NMBA). The size, morphology, biocompatibility, antimicrobial activity, thermal and swelling properties of the hydrogel were investigated by different characterization techniques. The biocompatibility of the hydrogel was confirmed by cytotoxicity analysis, which showed >95% survival of the BHK-21, Vero cell line. The drug loaded hydrogel showed antimicrobial property by forming 25 and 23 mm zone of inhibition against Staphylococcus aureus (gram-positive) and Escherichia coli (gram-negative) bacteria, respectively, in antimicrobial analysis. At pH 5.5, 76% of the drug was released from the hydrogel within 72 h, as observed in an in vitro drug release profile. In an in vivo test, the healing efficiency of the drug loaded hydrogel was examined on a mice model with dorsal wounds. Complete healing of the wound without any scar formation was achieved in 12 days, which revealed excellent wound healing properties of the prepared drug loaded semi-IPN hydrogel. These results showed the relevance of such a system in the rapid healing of acute wounds.