Type I collagen, a crucial component maintaining the structural integrity and physiological function of various tissues, is widely regarded as one of the most suitable biomaterials for healthcare applications. In this study, shad scales, used for treating ulcers, scalds, and burns in traditional Chinese medicine, were exploited for type I collagen extraction. After self-assembly into hydrogels, the extracted collagen was subsequently freeze-dried to form collagen sponges. The collagen sponge promoted rapid hemostasis, neovascularization, and immune regulation. Additionally, it accelerated the formation of granulation tissue, re-epithelialization, and collagen remodeling at the wound site in full-thickness skin wound rat models. Consequently, the shad scale collagen sponge holds great promise for the treatment of chronic wounds and skin regeneration. Notably, the shad was sourced from sustainably recirculating aquaculture systems (RAS) farms that adhere to the Traceable Management of Animal Products Safety, ensuring that the derived collagen possesses potential in the medical apparatus market.