Background: Acacia auriculiformis Benth. is a perennial shrub which has been traditionally known to treat various medical complications such as sore eyes, allergy, rheumatism, sore eyes, and rashes. Objectives: The current study is designed to decipher a shred of clinical confirmation and biochemical support for wound-healing efficacy of methanolic leaves extract of A. auriculiformis. Materials and Methods: We prepared the leaves extract in different solvents, i.e., petroleum ether, chloroform, ethyl acetate, acetone, butanol, and methanol. The in vitro studies were carried out on the above leaf's extracts using α-glucosidase and α-amylase inhibition in vitro antidiabetic assays. Animal model of streptozotocin-induced diabetes was used in the 0-, 7-, and 15-day studies, respectively. The comparison study was carried out in diabetic wound control in respect of the period of epithelialization, %wound contraction, and hydroxyproline content in the excision wound model. However, the breaking strength parameter was used to calculate healing potential in the incision wound model. The bioactive methanol extract was subjected to LC-MS/MS analysis to characterize the phytoconstituents responsible for pharmacological activity. Results: The methanolic leaves extract showed the highest percentage inhibition of 94.259% and 95.259% in α-glucosidase and α-amylase in vitro antidiabetic assays, respectively. The high content of collagen fibers and stronger epithelial cells growth were observed in histopathological studies of hydrogel containing methanolic leaves extract as compared to the diabetic wound control and standard. Subsequently, for investigating the biological impact upon live cells, cytotoxicity study was tested in different cell lines (A549, HEK-293, and MCF-7). Cytotoxic results showed that greater than 75% of cells were visible in all the cell lines, which gives the confirmation of biocapability of the extract. The LC-MS/MS results revealed the presence of compounds such as β-sitosterol, lupeol, stigmasterol, and quercetin. Conclusion: A. auriculiformis is a potent medicinal plant that can be further utilized as a complementary and alternative therapy for the treatment of diabetes-induced wounds and the management of oxidative stress and diabetes.