Diabetes mellitus continues to impose a devastating global burden, with approximately 537 million adults affected worldwide as of 2021 — a figure projected to reach 783 million by 2045. Among the most serious complications of diabetes is impaired wound healing, affecting nearly 25% of all diabetic patients and carrying significant risk of chronic ulceration, infection, and lower-limb amputation. This review article provides a comprehensive, evidence-based comparative evaluation of herbal and conventional pharmaceutical formulations used in the management of diabetic wounds. Drawing upon 36 peer-reviewed references published from 2010 to 2025, including randomized controlled trials, systematic reviews, meta-analyses, and preclinical studies, this article examines the pathophysiological mechanisms underlying impaired diabetic wound healing, evaluates the pharmacological profiles of both therapeutic approaches, and presents a multi-parameter efficacy and safety comparison. Results indicate that conventional formulations demonstrate superior wound closure rates (~85%) and infection control (~88%), while herbal formulations exhibit advantages in anti-inflammatory activity (~80%), long-term safety, cost-effectiveness, and wound recurrence prevention (~15%). An integrated, patient-centered therapeutic model combining both approaches is proposed as the most effective strategy for diabetic wound management. Future directions include large-scale clinical trials for herbal formulations, standardization of phytochemical preparations, and the development of nano formulation-based combinatorial delivery systems.