Ceredigion-based Lewis Coaches, which has 30 vehicles, is to stop its services on Friday.
The Confederation of Passenger Transport Cymru said 40 jobs were at risk.
It is the third bus company in Wales to collapse in the last two months.
More than 300 staff lost their jobs after Wrexham-based GHA Coaches went into administration in July, causing disruption on its routes across north Wales, Cheshire and Shropshire.
In June, Pembrokeshire firm Silcox Coaches, which provided school transport, local bus services and tours, ceased trading after 134 years.
Ceredigion council confirmed on Wednesday that Lewis Coaches, which is based in Llanrhystud, had also been put into administration.
It said the 701 commercial bus service from Aberystwyth to Carmarthen and Cardiff would end.
Simon Thomas, Plaid Cymru's Mid and West AM, said he had written to the Welsh Government asking for assurances about the bus route.
"We are completely reliant here in the west on bus services to provide reliable links between our communities and enable workers, students and tourists to travel," he said.
"Such an essential link cannot be allowed to lapse."
On its website, the bus company said it was closing "with great sadness".
"We would like to thank all our customers for their loyal custom over the years, and we hope this does not cause any problems for anyone," it added.
A bus service running from Aberystwyth to Carmarthen and on to Cardiff is to end after the company running it went into administration.