Occlusion and elasticity were combined in a novel cotton-based alginate dressing containing a nontoxic elastase inhibitor. Cotton gauzes were modified with a textile finishing process for incorporating alginate to yield a dressing material that retains elasticity while enhancing absorption. The algino-cellulose conjugates were formed through citric acid crosslinking of cellulose and alginate. The alginate-citrate finishes were applied to cotton gauzes in various formulations containing citric acid, sodium hypophosphite, and polyethylene glycol. The modified gauzes contain a citrate conjugate of alginate and cellulose that gels upon hydration. The alginate-citrate finishes were combined with the neutrophil elastase inhibitor, oleic acid, to demonstrate the ability of the algino-cellulose fibers to release the inhibitor and neutralize destructively high levels of neutrophil elastase found in nonhealing and burn wounds. Four types of gauzes were examined for the effect of the algino-cellulose finish on cotton gauze absorbency and elasticity. Fourier transform infrared (FTIR) spectroscopy of the film and alginate-citrate finished cotton showed formation of the alginate and citrate cellulose esters. Scanning electron microscopy analysis revealed large areas of the yarn surface covered by the alginate film with a smooth surface on the original fibers. Wetting of the gauze surface resulted in formation of a hydrated gel on the yarns with apparent swelling of the film and the fiber-coated alginate.