Property theory has received only limited attention by international investment law scholars being obscured by more positivist approaches. Investigating international investment law through the lens of a property theory, however, holds the promise of demystifying some interpretative dilemmas in the theory and practice of investment treaty arbitration and to gain some understanding of the complex dynamics between the regulatory powers of the state and private (property) rights of foreign investors. In particular, property theory can help in distinguishing regulation from expropriation and clarifying other investment treaty provisions. This article explores the conflict areas between investment treaty governance and the regulatory powers of the host state by focusing on environmental protection as a case study. Not only is international investment law not a self-contained regime, which should therefore be read in the light of relevant international law developments; but it also expressly includes provisions which acknowledge other values. Recent arbitrations have acknowledged the role that other values play in international relations thus contributing to the emergence of a property theory which acknowledges: 1) the private interests of the property owner; and 2) the social function of property and the relative limits thereof. This article argues that interpretation of the relevant investment treaty provisions may reconcile the different interests at stake, in the light of the limits of property and the recognized need to regulate it for the public weal.