The firm, which has a store in Bristo Place and another in Glasgow, sees tens of thousands of patients every year for a wide range of complaints.
Founded in 1860, the company is among the largest in the UK offering traditional herbal remedies and therapies.
Owner Dee Atkinson this week called in administrators while the business is restructured in the hope it can continue to operate.
Napiers is still trading and has urged customers who have used its services in the past to support it in the coming weeks.
It will continue to deliver medicines to current customers and those with prescriptions during the restructuring.
The firm said it took the difficult decision to close the Stockbridge branch earlier in the year, while Ms Atkinson sold her own home to allow the business to continue to trade.
Kenris MacLeod, a spokeswoman for Napiers, said changes in the law regarding the selling of herbal medicines as well as the poor retail climate had triggered the current situation.
In some cases traders must now pay thousands of pounds for a licence to make each product, while many products previously available over the counter are now only available with a prescription.
Ms MacLeod said: “We really need people to buy local and to support this local business.
“We’re determined to see another 150 years of herbal medicine in Edinburgh and our priority is to our patients.”
Along with trading from its two stores Napiers also operates clinics and offers acupuncture, hypnotherapy and counselling among other services.
The new regulations were introduced in April 2011 but there has been a delayed effect as remedies already on sale were allowed to remain on the shelves until they reach their expiry date.
Widely used products such as echinacea, St John’s Wort and valerian, as well as traditional Chinese and Indian medicines, have been restricted.
The industry had been covered by the 1968 Medicines Act, brought in when a handful of herbal remedies were available and the number of practitioners was small.
However, surveys have shown a quarter of adults in the UK have used a herbal remedy in recent years.
The EU raised safety concerns over the powerful effects of some remedies, and the reaction they can have when taken with conventional drugs.
Alasdair Baijal, a lawyer for BBM Solicitors, representing Napiers, said: “Napiers themselves have applied to the court for liquidation. The business is not necessarily unviable but its current structure is.
“The administrators will be working to restructure the business to allow it to continue to trade.”
A recipe for success
FOUNDED in 1860 by Duncan Napier, the eminent Victorian herbalist, Napiers has traded continuously for 162 years, providing alternative remedies and treatments for a range of complaints.
Napier started his career as an apprentice baker and suffered from a cough triggered by flour dust.
Looking for a cure, he turned to herbs and created his now famed Lobelia Cough Syrup. The medicine was so successful he joined the Edinburgh Botanical Society and trained professionally.
He opened the Bristo Place shop, where people queued for hours to see him, and sold remedies as far away as New York.
The business remained in the Napier family until the death of John Napier in the 1970s. Owned during the 1980s by alternative medicine guru Jan De Vries, current owner Dee Atkinson took over in 1989.