The incorporation of hydrogels with biocompatible functional components to develop wound dressings exhibiting potent antibacterial, antioxidant, anti-inflammatory, and angiogenic properties to promote diabetic wound healing is highly desirable yet continues to pose a significant challenge. In this study, wormwood essential oil (WEO) is successfully encapsulated within black phosphorus (BP) using a physical extrusion technique. Subsequently, this composite is encapsulated within biocompatible gelatin methacrylate (GelMA) and hyaluronic acid methacrylate (HAMA) hydrogels to create multifunctional hydrogel dressing (WEO@BP/GH). In comparison to traditional hydrogels, BP enhances the encapsulation stability of WEO and improves the microenvironmental regulation capabilities through NIR-triggered release of WEO. Systemic in vitro experiments demonstrate that synergistic interaction between the diverse bioactive components of WEO and photothermal effects of BP results in highly effective antibacterial activities against S. aureus and E. coli, antioxidant of scavenging ROS, anti-inflammation of downregulating M1/M2 macrophages ratio, and angiogenic properties. Moreover, the in vivo tests demonstrate that WEO@BP/GH hydrogel significantly enhances high-performance diabetic wound repair through the acceleration of hemostasis, promotion of collagen deposition, regulation of inflammatory responses, and facilitation of vascularization. The findings indicate that WEO@BP/GH hydrogel holds considerable promise as a candidate for microenvironment regulation and effective diabetic wound healing across various clinical applications.