Naholo, who is currently in a knee brace, has undergone an MRI scan – revealing a grade two MCL injury.
He suffered the injury at Highlanders training on Monday.
The injury could not come at a worse time for the Highlanders who are without All Blacks halfback Aaron Smith for a similar time frame due to an ankle injury.
It is also lousy timing for Naholo as he seeks a resurgence in form ahead of the Rugby World Cup, which starts in Japan in September.
Naholo, who has played 26 test for the All Blacks, has been struggling this Super Rugby season and played a shocker in the Highlanders' loss against the Blues at Eden Park on March 22.
He is under pressure from up-and-comer George Bridge and multi-tasking backs Jordie Barrett and Ben Smith for his right wing spot in the All Blacks squad.
However, he could still be in the frame if he regains his brilliance in the latter rounds of the Super Rugby competition, with New Zealand's first test in a truncated Rugby Championship being against Argentina in Buenos Aires on July 20.
The Fijian-born flyer has a history of leg injuries, the most notable one being the broken leg he suffered in the All Blacks' test against Argentina in July 2015, which appeared to rule out his chances of making the World Cup later that year.
But after seeking treatment, which included a village doctor in Fiji using a plant called kawakawarau on his fractured fibula, he was cleared to play, though didn't feature in the side in the finals series before they won the cup final against Australia at Twickenham.
The Highlanders host the Hurricanes on Friday night at Forsyth Barr Stadium.
They are yet to name a squad replacement for Naholo.