This study tested the hypothesis that diabetic wound treatment with biomimetic pro-angiogenic, proteolytically and mechanically stable RADA16-II peptide nanofibers promotes regenerative wound healing via attenuation of inflammation and stimulation of neovascularization. Two full-thickness excisional dorsal skin wounds were created on 8-10 week old female db/db mice and treated with nanofiber hydrogel or saline (control). Animals were euthanized on days 7, 14, 28, and 56 and their wounds were analysed for morphology, vascularization, strength, and inflammation. We observed that in situ treatment of db/db mouse wounds with nanofiber hydrogel resulted in regenerative healing, indicated by the increased presence of elastin fibrils, restored biomechanical properties, and reestablishment of a mature epidermis complete with basal, suprabasal, and stratified layers compared to saline-treated wounds. Additionally, wounds treated with nanofiber hydrogel exhibited enhanced neovascularization, increased expression of anti-inflammatory cytokine interleukin-10, reduced expression of inflammation markers and transforming growth factor-β1 and -β2, as well as decreased myofibroblast counts. Overall, this novel drug-free approach enables accelerated diabetic wound healing by shifting inflammatory and pro-fibrotic cytokine balance towards factors associated with neovascularization-driven regenerative healing in the wound microenvironment. Our results demonstrate that in situ manipulation of the wound microenvironment using bio-mimetic peptide NF matrix may be a promising strategy for faster and more durable wound closure to improve healing of chronic wounds.