In this work, we have developed chitosan hydrogel/nanofibrin composite bandages (CFBs) and characterized using Fourier transform-infrared spectroscopy and scanning electron microscopy. The homogeneous distribution of nanofibrin in the prepared chitosan hydrogel matrix was confirmed by phosphotungstic acid–hematoxylin staining. The mechanical strength, swelling, biodegradation, porosity, whole-blood clotting, and platelet activation studies were carried out. In addition, the cell viability, cell attachment, and infiltration of the prepared CFBs were evaluated using human umbilical vein endothelial cells (HUVECs) and human dermal fibroblast (HDF) cells. It was found that the CFBs were microporous, flexible, biodegradable, and showed enhanced blood clotting and platelet activity compared to the one without nanofibrin. The prepared CFBs were capable of absorbing fluid and this was confirmed when immersed in phosphate buffered saline. Cell viability studies on HUVECs and HDF cells proved the nontoxic nature of the CFBs. Cell attachment and infiltration studies showed that the cells were found attached and proliferated on the CFBs. In vivo experiments were carried out in Sprague-Dawley rats and found that the wound healing occurred within 2 weeks when treated with CFBs than compared to the bare wound and wound treated with Kaltostat. The deposition of collagen was found to be more on CFB-treated wounds compared to the control. The above results proved the use of these CFBs as an ideal candidate for skin tissue regeneration and wound healing.