The main objective of this work was to investigate the mechanism of Astragalus aqueous extract ulcer healing in diabetic foot model rats through the hypoxia-inducible factor 1-alpha (HIF-1ɑ)/vascular endothelial growth factor (VEGF) signalling pathway. Fifty specific-pathogen-free male Sprague Dawley rats were divided into blank (A), model control (B), Astragalus extract (C) and mupirocin (D) treatment groups. Group A received a regular diet, whereas the other groups received a high-fat/high-sugar diet and intraperitoneal streptozotocin injections to induce diabetes. Diabetic foot ulcers were created via skin excision. Subsequently, ulcers were debrided daily. Groups B, C and D received wet saline gauze, wet gauze with Astragalus extract and gauze with mupirocin, respectively, on the affected area. Group A received no treatment. After 14 days, the rats were assessed for ulcer healing and general condition. Immunohistochemistry was used to detect HIF-1ɑ and VEGF levels in the dorsalis pedis artery, and ELISA was used to determine serum IL-6 and CRP levels. The results revealed that Groups C and D had significantly faster ulcer healing compared with Group B (p < 0.01), and ulcer healing was faster in Group C than in Group D (p < 0.01). Group C exhibited notably higher HIF-1ɑ and VEGF protein expression levels compared with Groups B and D (p < 0.01). IL-6 and CRP expression levels in Groups C and D were significantly lower than those in Group B (p < 0.01). In summary, Astragalus aqueous extract effectively treats diabetic foot ulcers by up-regulating HIF-1ɑ and VEGF expression, activating the HIF-1ɑ/VEGF pathway, improving local tissue ischaemia and hypoxia, promoting collateral circulation and enhancing dorsalis pedis artery formation, thereby accelerating ulcer repair in diabetic rats.