Chronic wounds represent a major healthcare and economic problem worldwide. Advanced wound dressings that incorporate bioactive compounds have great potential for improving outcomes in patients with chronic wounds but significant challenges in designing treatments that are effective in long-standing, nonhealing wounds. Here, an optimized wound healing gel was developed that delivers syndecan-4 proteoliposomes (“syndesomes”) with fibroblast growth factor-2 (FGF-2) to enhance diabetic wound healing. In vitro studies demonstrate that syndesomes markedly increase migration of keratinocytes and fibroblasts isolated from both nondiabetic and diabetic donors. In addition, syndesome treatment leads to increased endocytic processing of FGF-2 that includes enhanced recycling of FGF-2 to the cell surface after uptake. The optimized syndesome formulation was incorporated into an alginate wound dressing and tested in a splinted wound model in diabetic, ob/ob mice. It was found that wounds treated with syndesomes and FGF-2 have markedly enhanced wound closure in comparison to wounds treated with only FGF-2. Moreover, syndesomes have an immunomodulatory effect on wound macrophages, leading to a shift toward the M2 macrophage phenotype and alterations in the wound cytokine profile. Together, these studies show that delivery of exogenous syndecan-4 is an effective method for enhancing wound healing in the long-term diabetic diseased state.