Walters, who has kicked 19 goals in eight games this season, suffered the injury in Saturday night's draw against the Sydney Swans, limping off in the third quarter and taking no further part in the match.
Scans on Monday confirmed the 22-year-old had suffered a high ankle sprain, ruling him out of clashes against Melbourne and the Adelaide Crows ahead of the club's mid-season bye.
Fremantle faces the Brisbane Lions and North Melbourne following its round 11 break.
Walters emerged as one of the game's most influential small forwards in the second half of last season, returning from a club-imposed ban to kick 22 goals in 10 games.
His revival had continued this season, kicking multiple goals in every match except for the round four loss to Hawthorn and Saturday night's draw.
He has kicked 41.25 in his last 18 games, with Saturday night's match the first time he had been held goalless since returning to the team after he was banished to WAFL club Swan Districts until he met club fitness standards.
Fremantle is waiting for Matthew Pavlich (Achilles tendon), Stephen Hill (quad), Aaron Sandilands (hamstring), Anthony Morabito (knee) and Lachie Neale (ankle) to return from injury.
Ruckman Jon Griffin and tall forward Kepler Bradley will miss the rest of the season following knee reconstructions.
