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Objectives: Sheep butter has been traditionally used in the local villages of upper Himalayan region for its various dermatological benefits. In the current study, sheep butter cream was formulated and evaluated for its wound healing properties for the purpose of scientific validation, standardization, safety, efficacy evaluation. Methods: Nine formulations were developed with varying concentrations of ingredients and evaluated for different parameters. Optimized formulations showing neutral pH, good homogeneity and texture, viscosity, spreadability, consistency and antibacterial activity were selected for evaluation of wound healing property in excision wound model and were compared to standard marketed product. Results: From the results obtained, it was observed that formulated creams enabled easy application and removal from the skin without any evidence of irritation, erythema or leftover residue. Amongst all formulations, F-11, F-12 and F-13 showed the most satisfactory properties and were studied in details. Formulations F-12 and F-13 containing 7.5 g and 10g sheep butter respectively were chosen for evaluation of wound healing activity in excision wound model in albino rats. It was noted that on the 15th post-wounding day, F-12 and F-13 showed 94.4±0.3% and 96.9±0.6% wound contraction respectively, which were found to be significantly higher when compared with the wound contraction of control group (79.3±7.5%) and was comparable with the standard group. Conclusion: Thus sheep butter appears to be effective agent in the management of wound healing activities.