Application of plant extracts for the burn/wound treatment is followed over the decades as a common practice and it is an important aspect in clinical management. In this study porous collagen sponges (CS) were prepared using fish scales and were incorporated with mupirocin (CSM) and extracts of Macrotyloma uniflorum (CSPE) separately to impart antimicrobial activity to the sponges. The results showed that the addition of plant extract increased the tensile strength of CSPE and stability against collagenase enzyme. FTIR studies have shown the incorporation of plant extract in CSPE, SEM studies have revealed the porous nature of the sponges and XRD patterns have shown the retention of collagen triple helical structure even after the addition of plant extract. CSPE and CSM have exhibited antimicrobial properties. The sponges prepared were analysed for their in vitro biocompatibility studies using fibroblasts and keratinocyte cell lines and the results have shown their biocompatible nature. Based on the results obtained, CS, CSM and CSPE may be tried as a burn/wound dressing materials, initially, in small animals in vivo.