Chronic wounds contain elevated levels of proteases, proinflammatory cytokines, and free radicals. The presence of bacteria further exaggerates the tissue-damaging processes. For successful treatment, the wound dressing needs to manage wound exudates, create a moist environment, inhibit infection, bind pathophysiological factors that are detrimental to wound healing, and provide thermal isolation. Furthermore, it has to relieve pain, be easy to use, show no allergic potency, and not release toxic residues. The present study suggests a comprehensive in vitro approach to enable the assessment of wound dressings to support optimal conditions for wound healing. Three alginate-based wound dressings: alginate alone, alginate containing ionic silver, and alginate with nanocrystalline silver, were tested for biocompatibility, antimicrobial activity, and influence on chronic wound parameters such as elastase, matrix metalloproteases-2, tumor necrosis factor-alpha, interleukin-8, and free radical formation. Alginate was found to bind considerable amounts of elastase, reduce the concentration of proinflammatory cytokines and inhibit the formation of free radicals. Furthermore, alginate showed antibacterial activity and high biocompatibility. Incorporation of silver into alginate fibers increased antimicrobial activity and improved the binding affinity for elastase, matrix metalloproteases-2, and the proinflammatory cytokines tested. Addition of silver also enhanced the antioxidant capacity. However, a distinct negative effect of silver-containing alginates on human HaCaT keratinocytes was noted in vitro.