Diabetic ulcer is regarded as one of the most prevalent chronic diseases. The healing of these ulcers enhances with the use of herbal extracts containing wound dressings with high antibacterial property and creating a nano-sized controlled release system. In this study, new peppermint extract was incorporated in the polyurethane- (PU-) based nanofibers for diabetic wound healing. The peppermint extract was used as an herbal antimicrobial and anti-inflammatory agent. The absorption ability of the wound dressing was enhanced by addition of F127 pluronic into the polymer matrix. The release of the extract was optimized by crosslinking the extract with gelatin nanoparticles (CGN) and their eventual incorporation into the nanofibers. The release of the extract was also controlled through direct addition of the extract into the PU matrix. The results showed that the release of extract from nanofibers was continued during 144 hours. The prepared wound dressing had a maximum absorption of 410.65% and an antibacterial property of 99.9% against and bacteria. An in vivo study indicated on significant improving in wound healing after the use of the extract as an effective compound. On day 14, the average healing rate for samples covered by conventional gauze bandage, PU/F127, PU/F/15 (contained extract), and PU/F/15/10 (contained extract and CGN) prepared with different nanoparticle concentrations of 5 and 10 was 47.1 ± 0.2, 56.4 ± 0.4, 65.14 ± 0.2, and 90.55 ± 0.15%, respectively. Histopathological studies indicated that the wound treated with the extract containing nanofibers showed a considerable inflammation reduction at day 14. Additionally, this group showed more resemblance to normal skin with a thin epidermis presence of normal rete ridges and rejuvenation of skin appendages. Neovascularization and collagen deposition were higher in wounds treated with the extract containing nanofibrous wound dressing compared to the other groups.