The former international pop superstar is one of the biggest selling females in the history of music.
The claims have been made by sister-in-law Tina Brown, herself a former drug addict. She is the sister of Houston's bad-boy husband, R&B singer Bobby Brown.
Photographs accompanied the reports and one is alleged to have been taken in the bathroom of Whitney's home and captures a scene of extravagant drug-taking.
Brown told the National Enquirer: "The truth needs to come out. Whitney won't stay off the drugs. It's every single day. It's so ugly. Everyone is so scared she is going to overdose."
She claims that Whitney, 42, has become wracked by delusional hallucinations and self-abuse, with husband Bobby at the centre of her fears. Tina said: "She'll point to the floor and say, 'See that demon. I'm telling you somebody's messing with Bobby'. She always thinks it's something to do with Bobby, but it's her, hitting herself."
Tina added: "I understand what she's going through. Addiction is a disease. Maybe this interview will save her life."
Nancy Seltzer, a spokeswoman for Houston, has declined to comment on the revelations.
The sister-in-law of the multi-Grammy winner made the allegations as she spilled her own drug secrets to The National Enquirer in an exclusive report in its April 10 issue.
Brown admits she "did crack with Whitney" on many occasions, but says she went straight last August.
Lurid photos supplied by Brown, and reportedly taken in January at Houston's Georgia home, show a filthy bathroom littered with drug paraphernalia, including powder-coated spoons, garbage and debris.
The Enquirer story says Houston was regularly using drugs in early and mid-2004.
Houston was one of the biggest female artists of her generation - with a string of hit singles in the 80s and 90s, including I Wanna Dance With Somebody and I Will Always Love You. She has sold more than 100 million albums worldwide.