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Excessive bleeding can complicate surgical intervention; this could be managed using an effective hemostatic agent that provides immediate and early bleeding control. Gelatin sponge and <i>Calendula officinalis</i> have been proven to have good hemostatic properties. The present <i>In-vitro</i> study analyzed the cytotoxicity and hemostatic properties of gelatin sponge and <i>Calendula officinalis</i>. The cytotoxic concentration/effective concentration of <i>Calendula officinalis</i> was determined by MTT (3-[4,5-dimethylthiazol-2-yl]-2,5 diphenyl tetrazolium bromide) assay. The drug release was determined using a vertical Franz diffusion cell apparatus; solid-state characterization was assessed using Fourier-transform infrared spectroscopy (FTIR) and a differential scanning calorimeter (DSC). The MTT assay showed 7% <i>Calendula officinalis</i> to be cytocompatible, and there was an increase in cell proliferation. When the 7% <i>Calendula officinalis</i> was loaded into the sponge, it was compatible, and the drug content was found to be 56.28 ± 13.84%. The time taken for the blood clot formation was measured using the Lee–White method. The gelatin sponge’s time for clot formation was 161.70 ± 3.11 s, and the <i>Calendula officinalis</i> loaded gelatin sponge’s time for clot formation was 158.75 ± 4.60 s. Hence, it could be concluded that when <i>Calendula officinalis</i> is incorporated into a gelatin sponge, it shows material compatibility and cytocompatibility, reduces the time for clot formation, and could be used as an alternative to other hemostatic agents.