Non-healing wounds have a negative impact on quality of life and account for many cases of amputation and even early death among patients. Diabetic patients are the predominate population affected by these non-healing wounds. Despite the significant clinical demand, treatment with biologics has not broadly impacted clinical care. Interleukin-4 (IL-4) is a potent modulator of the immune system, capable of skewing macrophages towards a pro-regeneration phenotype (M2) and promoting angiogenesis, but can be toxic after frequent administration and is limited by its short half-life and low bioavailability. Here, we demonstrate the design and characterization of an engineered recombinant interleukin-4 construct. We utilize this collagen-binding, serum albumin-fused IL-4 variant (CBD-SA-IL-4) delivered in a hyaluronic acid (HA)-based gel for localized application of IL-4 to dermal wounds in a type 2 diabetic mouse model known for poor healing as proof-of-concept for improved tissue repair. Our studies indicate that CBD-SA-IL-4 is retained within the wound and can modulate the wound microenvironment through induction of M2 macrophages and angiogenesis. CBD-SA-IL-4 treatment significantly accelerated wound healing compared to native IL-4 and HA vehicle treatment without inducing systemic side effects. This CBD-SA-IL-4 construct can address the underlying immune dysfunction present in the non-healing wound, leading to more effective tissue healing in the clinic.