Purpose Complex diabetic foot wounds (DFUs) with exposed bone, tendon, or extensive soft tissue loss remain a major challenge in limb salvage. Biodegradable Temporising Matrix (BTM) is an emerging dermal substitute for wound bed reconstruction; however, predictors of success in high-risk diabetic foot populations remain poorly defined. This study evaluates outcomes following BTM and identifies patient and wound factors associated with successful wound healing. Methodology A prospective observational study of BTM cases from April 2024 to June 2026 was conducted at a single tertiary Australian Diabetic Foot Service. Twenty-three patients (24 limbs) were included. Baseline demographics, wound characteristics, WIfI stage, dialysis dependence, and osteomyelitis were recorded. Outcomes included complete wound healing, amputation, mortality, length of hospital stay (LOS), and readmissions. Results Mean age was 66 years (54–80) with median follow-up of 29 weeks (IQR 0–43). Mean LOS was 25 days (IQR 3–66). Complete wound healing occurred in 11 limbs (45.8%) at a median of 29 weeks. Most achieved graft integration, with 2 required split-skin graft. Complications included graft loss in 6 limbs, minor amputation in 5, and major amputation in 3. Three deaths (12%) occurred, all unrelated to the procedure. Readmissions occurred in 14 cases, primarily for wound management or further intervention. WIfI stage 3–4, osteomyelitis, and dialysis dependence were associated with poorer outcomes, though dialysis numbers were small. WIfI stage was most consistently associated with delayed wound healing, higher LOS and readmissions. Conclusion BTM is a useful adjunct in selected complex DFUs, achieving moderate wound healing. Outcomes are primarily driven by limb threat severity and infection burden, particularly WIfI stage and osteomyelitis. Resource utilisation remains substantial, with prolonged admission and readmissions. Careful patient selection is essential to optimise limb salvage and reduce treatment burden.