One of the most advanced, promising, and commercially viable research issues in the world of hydrogel dressing is gaining functionality to achieve improved therapeutic impact or even intelligent wound repair. In addition to the merits of ordinary hydrogel dressings, functional hydrogel dressings can adjust their chemical/physical properties to satisfy different wound types, carry out the corresponding reactions to actively create a healing environment conducive to wound repair, and can also control drug release to provide a long-lasting benefit. Although a lot of in-depth research has been conducted over the last few decades, very few studies have been properly summarized. In order to give researchers a basic blueprint for designing functional hydrogel dressings and to motivate them to develop ever-more intelligent wound dressings, we summarized the development of functional hydrogel dressings in recent years, as well as the current situation and future trends, in light of their preparation mechanisms and functional effects.