Faddes (24) made his debut at this level last week and showed a couple of good touches as the Highlanders lost narrowly to the Blues.
But he will be in the game from the start on Saturday as Naholo is out for up to two months with a broken leg.
Faddes, who hails from South Otago, can play most positions in the backline, and played well at centre for Otago in the ITM Cup last year.
Coach Jamie Joseph has made two other changes to his starting side with No 8 Liam Squire replaced by Luke Whitelock and prop Daniel Lienert-Brown moved to the bench to be replaced by Brendon Edmonds.
Highlanders: Ben Smith (co-captain), Matt Faddes, Malakai Fekitoa, Tei Walden, Patrick Osborne, Lima Sopoaga, Aaron Smith, Luke Whitelock, Shane Christie (co-captain), Elliot Dixon, Joe Wheeler, Tom Franklin, Josh Hohneck, Liam Coltman, Brendon Edmonds. Reserves: Ash Dixon, Daniel Lienert-Brown, Siosiua Halanukonuka, Liam Squire, Dan Pryor, Josh Renton, Hayden Parker, Jason Emery.
