Background: In developing new products for skin care and wound treatment, biocompatibility plays a major role in the choice of ingredients. Thymol, an essential oil extracted from thyme plant, exhibits outstanding antibacterial properties, but more importantly, it proves to be much more compatible to skin cells in comparison to some conventionally used antibiotic drugs and chemicals. Objective: The aim of the study was the use of thymol as an antibacterial and wound healing promoting agent in development of a novel wound dressing. Methods: The antibacterial properties of thymol before and after application in the dressing were analyzed by MIC and Disk Diffusion methods respectively. To ensure biocompatibility, MTT assay was used to assess the effect of thymol on skin fibroblast cells. In addition, effects of thymol on dressing’s structure and its mechanical properties were studied by SEM and tensile strength tests respectively. Results: MIC investigation showed that thymol is capable of halting bacterial growth in concentrations as low as 156ppmdepending on the bacterial strain. Assessment of the product containing thymol by Disk diffusion method proved that the essential oil would retain its effectiveness when incorporated in the final product. Investigation of thymol’s biocompatibility by MTT assay resulted in a rather unexpected outcome, thymol increased fibroblast cell growth significantly, but the exact amount could not be calculated due thymol’s interference with the test material (MTT). Furthermore, increasing the concentration of thymol in the dressing increased its porosity and elongation on stress, but reduced its pore size and maximum stress. Conclusion: The observed data backed the original claim of antibacterial and wound healing properties, but also showed that incorporating thymol into the dressing increases its elasticity and porosity, but reduces its mechanical strength.