The USA youth international had been a regular at right-back in Sam Ricketts' team this season but limped off with a knee injury early in the second half of last Tuesday's draw against Burton.
Fossey, 22, was sent for a scan towards the end of last week and Town are still waiting on the opinion of specialists but he is set to miss between two and three months.
The California-born Fulham full-back has previously been troubled by serious knee injury.
Ricketts said: "Marlon's returned to Fulham and they'll be assessing him and taking over the initial bit of his rehabilitation.
"We're still waiting on the exact diagnoses but he's going to be between two or three months at least depending on the surgical opinion."
Ricketts confirmed the defender's loan has not been terminated. Fossey has made nine appearances so far for Town in what has been a breakthrough season.
"He's got huge physical attributes, he's good on the ball and has an awful lot going for himself," Ricketts said.
"He's as disappointed as anyone with this knock. You won't meet many lads as keen as him to play and live his life, do everything right for football.
"It's a devastating blow for him but he'll have got a lot out of the games he's played already in terms of his development and he just needs to make himself ready so when he is back he is ready to go again."