Moody picked up the injury in Bath's West Country derby defeat to Gloucester on Friday night and will now miss the opening two rounds of the Heineken Cup.
"Lewis took a serious knock at the weekend, which is obviously very tough on him," said Bath head coach Steve Meehan.
"He was just getting used to the Bath style of play, and it's equally frustrating for the rest of us to lose him at this stage in the season.
"We will of course make sure he receives the best possible attention to get him back on the field as and when he's ready.
"The only good news is it gives an opportunity for someone else to step up and fill the hole."
The news comes as a big blow for England team manager Martin Johnson, who had been expected to name Moody as national skipper for the games against New Zealand, Australia, Samoa and South Africa.
Moody, who was a try scorer for the Lions against the All Blacks five years ago, starred in the role of captain in England's Six Nations clash with France and their summer tour of the southern hemisphere.
He now faces a race against time to be fit for the first match of the autumn series against Richie McCaw's Kiwis on Saturday, November 6.