The All Black and Highlanders winger will be sidelined for the next two months after fracturing the same leg which threatened to derail his World Cup dream last season.
He will be joined by Japanese halfback Fumiaki Tanaka, who is expected to be out with a calf injury for four weeks.
It is a big blow for the Highlanders.
Naholo was one of the stars during the 2015 campaign.
He picked up the fracture late during the 33-31 loss to the Blues at Eden Park on Friday night.
"While this is very unfortunate for Waisake, the positive news is that this injury is not as bad as his last fracture,'' Highlanders team doctor Greg Macleod said.
"He is already managing well and it's expected his rehab will take six to eight weeks.''
The 24-year-old Fijian fractured his leg during his debut for the All Blacks last year.
It appeared as if the injury would rule him out of the World Cup.
But he decided to returned to Fiji for some alternative medical treatment.
He regained his fitness and was named in the All Blacks.
But this time Naholo will not be returning to Fiji.
Macleod will manage his rehabilitation.
Tanaka injured his calf during the final training before the game against Blues and was replaced on the bench by Josh Renton.
He has torn his calf and recovery is expected to take four weeks.
Highlanders coach Jamie Joseph was philosophical about the injuries.
"To lose players for an extended period is always disappointing but you have to expect injuries to occur at some point,'' he said.
"As a group we simply deal with it and move on. The focus for the players now will be to rehab well and work to make themselves available again.''
There was some good news on the injury front for the Highlanders earlier in the week.
No8 Liam Squire, who played just 25 minutes of the game against the Blues, was sent to hospital after he coughed up some blood.
But he was cleared and is back training with the team.
The Highlanders host the Hurricanes at Forsyth Barr Stadium on Saturday.
It is a re-match of last year's final.
