Disposable nappies are favoured by parents
The campaign was launched on Thursday as mothers who have already made the switch marched on the Scottish Parliament.
Edinburgh Real Nappy Network (ERNN) organised the demonstration, which attracted support from a number of MSPs.
Network members claim local authorities could save hundreds of thousands of pounds a year by reducing the number of nappies being sent to landfill sites.
The group's Morag Davidson said it was hoped parents would recognise the benefits of using cloth nappies instead of disposable ones.
She said: "We are trying to make parents aware that there are other options apart from disposable nappies.
"By using them, mothers are not only being kind to their babies by using natural materials but they're benefiting us all by helping the environment."
Colette Healy, a mother-of-two and member of ERNN, said young parents need to be re-educated about the merits of cloth nappies.
She said: "It's ridiculous the amount of disposable nappies that are put into landfill sites and the damage they do to the environment is terrible.
"The problem is that the information about cloth nappies is not readily available to new parents and we want them to be made aware of the alternatives.
"It's only through education from midwives and healthcare professionals that young mothers will find out about real nappies and why they should use them."
Mrs Healy added: "Buying real nappies can also save you a fortune. It costs about £2,000 to keep one baby in disposable nappies, but for about £200 you can have a full range of cloth nappies which can be used by three babies."
Bruce Crawford, the Scottish National Party's environment spokesman, said the mothers' campaign was a valid way of trying to raise people's awareness of the impact of disposable nappies on the environment.
He added: "I'm sure this campaign will lead to more and more families being prepared to use traditional methods."
Green MSP Robin Harper also said he was fully behind the campaign.
He said: "We're the worst recycling nation in Europe and put more into landfill sites than anywhere else.
"Four per cent of that waste is nappies, so we should be trying to make people realise that re-usable nappies provide a very genuine alternative.
"There's a significant number of people beginning to change and with a little bit of help from local authorities, that number will increase."
Councillor Brian Fallon said Edinburgh City Council spent £200,000 disposing of nappies alone.
Kevin Dunion, chief executive of Friends of the Earth Scotland, also backed the campaign saying that disposable nappies represent a major environmental problem.
He added: "Using real nappies can save you money, help create real jobs and reduces our impact on the environment."