Nanofibrous membrane (NFM) intended as wound dressing was prepared by electrospinning polyurethane (PU) solution containing silver ion, followed by reduction of silver ion to silver nanoparticles. The electrospun PU membrane has high surface area-to-volume ratio, controlled evaporative water transmission rate, good fluid drainage ability, and excellent antimicrobial activity. With an aim to promote wound healing, collagen was grafted to fiber surface by low temperature oxygen plasma treatment, which could improve surface hydrophilicity and facilitate covalent binding of collagen molecules to the plasma-treated PU surface. A NFM with no bead formation was obtained with fiber diameters around 159 nm. The presence of embedded silver nanoparticles and surface-grafted collagen was confirmed qualitatively and quantitatively. After modification, the NFM's antimicrobial activity improved to approximately 100% inhibition of bacterial growth with concomitant increase of membrane water absorption ability, which facilitates its use as a functional wound dressing. From animal studies, the NFM was better than gauze and commercial collagen sponge wound dressing in wound healing rate.