Wound infections are challenging to manage, requiring innovative wound dressing systems with prescribed properties. Active wound dressings should provide a moist environment, protect from secondary infections, and remove wound exudate to accelerate tissue regeneration. Hydrogels are encouraging matrices for bioactive compound encapsulation in pharmaceutical applications. The aim of the present study is to design chitosan/gelatin /polyvinyl alcohol-based xerogel film containing nystatin for wound dressing applications with antifungal properties. The xerogel film is developed using a film-casting method and evaluated for its chemical and physical characteristics using FTIR, SEM, AFM, and tensile analysis. Water barrier properties of the film, such as the moisture content (17.84 ± 3.62 %), water solubility (44.50 ± 5.55 %), gel fraction (55.50 ± 5.55 %), and water vapour transmission rate (1912.25 ± 248.12 g m⁻² per day), suggest a humid microenvironment suitable for wound. The xerogel film, characterized by its robust mechanical strength, substantial swelling capacity (∼120–400 %) across various pH levels, and acceptable bio-adhesive properties, reveals as a potential antifungal wound dressing material. In vitro toxicity assessments confirm its biocompatibility towards both RBCs and NIH-3 T3 fibroblast cells. The findings confirm that the film formulation has strong antifungal properties, with a minimum inhibitory concentration of 2–8 μL/mL against Candida species, as well as outstanding antibiofilm effectiveness (∼85 %) and a significant reduction of the fungal colony count (∼100 %). Moreover, its controlled drug release capabilities, along with antifungal properties, offer it as an appealing dressing for the localized treatment of superficial fungal infections. As a result, this xerogel film can be used as a versatile platform for advanced wound care and therapeutic applications.