The ability to safely and quickly close wounds and lacerations is an area of need in regenerative medicine, with implications toward healing a wide range of tissues and wounds. Using an in vivo corneal injury model, our study applied a newly developed peptide capable of promotion of wound healing and epithelial regeneration. The alpha-carboxy terminus 1 (αCT1) peptide is a 25 amino acid peptide from the C-terminus of connexin 43 (Cx43), modified to promote cellular uptake. Previous studies applying αCT1 to excisional skin wounds in porcine models produced tissues having an overall reduced level of scar tissue and decreased healing time. Rapid metabolism of αCT1 in previous work led to the investigation of extended release on wound healing rate used in this study. Here we delivered αCT1 both directly, in a concentrated pluronic solution, and in a sustained system, using polymeric alginate-poly-l-ornithine (A-PLO) microcapsules. Cell toxicity analysis showed minimal cell-loss with microcapsule treatment. Measurement of wound healing using histology and fluorescence microscopy indicated significant reduction in healing time of αCT1 microcapsule treated rat corneas compared with controls (88% vs. 38%). RT-PCR analysis showed an initial up regulation followed by down regulation of the gene keratin-19 (Krt19). Zonula occludens 1 (ZO-1) showed an opposite down regulation followed by an up regulation whereas Cx43 showed a biphasic response. Inflammatory indexes demonstrated a reduction in the inflammation of corneas treated with αCT1 microcapsules when compared with pluronic gel vehicle. These results suggest αCT1, when applied in a sustained release system, acts as a beneficial wound healing treatment.