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Hydrogels, with excellent hydrophilicity and high-water content, have emerged as highly versatile biomaterials for tissue engineering and regenerative medicine. On account of the natural mimicry of extracellular matrix (ECM), moisture retention, porosity, biocompatibility, biodegradability, and tunable functionality, they provide crucial structural and biochemical support for tissue repair. As chronic wounds, aging, and degenerative diseases continue to increase, hydrogels offer great potential to overcome the limitations of traditional therapies. Despite these developments, there remains a crucial need for hydrogels that can effectively address the complex, multiphase nature of tissue repair while being cost-effective and easily applicable in various clinical settings. This review begins by taking wound healing as a representative example, particularly elaborating on the process of wound healing and therapeutic strategies to illustrate the importance of hydrogel design by tissue engineering technology. We then comprehensively evaluate the emerging hydrogel systems that integrate multiple therapeutic functions, including drug delivery, infection prevention, stimulus responsiveness, and clinical translation for wound dressings. Additionally, this review further extends to the application scope and incorporates the latest research advancements of multifunctional hydrogels in other biomedical applications. Finally, we summarize the shortcomings of existing studies and propose future research directions, with a view to providing a valuable reference basis for the development of multifunctional hydrogels within the realm of tissue engineering and regenerative medicine.