The skin is fragile, making it very vulnerable to damage and injury. Untreated skin wounds can pose a serious threat to human health. Three-dimensional polymer network hydrogels have broad application prospects in skin wound dressings due to their unique properties and structure. The therapeutic effect of traditional hydrogels is limited, while multifunctional composite hydrogels show greater potential. Multifunctional hydrogels can regulate wound moisture through formula adjustment. Moreover, hydrogels can be combined with bioactive ingredients to improve their performance in wound healing applications. Stimulus-responsive hydrogels can respond specifically to the wound environment and meet the needs of different wound healing stages. This review summarizes the material types, structure, properties, design considerations, and formulation strategies for multifunctional hydrogel composite dressings used in wound healing. We discuss various types of recently developed hydrogel dressings, highlights the importance of tailoring their physicochemical properties, and addresses potential challenges in preparing multifunctional hydrogel wound dressings.