This paper explores how property rights arrangements affect the equity, efficiency and sustainability of high-altitude rangeland management in Bhutan from the perspectives of rangeland users. Property rights affect how natural resources are allocated to individuals, communities and institutions and how they are managed. In Bhutan, only grazing rights are granted to rangeland users, as ownership of rangeland lies with the State. Three case study areas were selected across Bhutan with different levels of rangeland degradation, governance arrangements and property rights regimes. Semi-nomadic yak herders, sedentary livestock farmers and government officials participated in 40 semi-structured interviews and nine focus group discussions between 2013 and 2014. Findings revealed that historical inequities exist with private leases and some communal leases, but government-supported leases with management rights are considered more equitable. All property rights systems can become unproductive and inefficient with increasing populations, but communal areas are at greater risk of sub-optimal resource use and conflicts. Respondents were concerned about the lack of management rights, uncertainty over future lease arrangements and climate change impacts. This research revealed that (i) assignment of incomplete property rights is detrimental to efficient and sustainable natural resource management; (ii) banning of traditional practices such as burning, clearing and cutting of shrubs and bushes could undermine conservation by triggering natural resource degradation; (iii) granting of management rights in the bundle of rights is vital to encourage provisioning and maintenance activities; and (iv) in the absence of official contracts, deeds or titles which provide tenure security and political legitimacy, equitable distribution, clear boundary demarcation with written norms and rules are not sufficient to foster long-term investment in provisioning and maintenance activities. We discuss the implications of the findings for delayed implementation of the Land Act 2007 aimed at a more equitable redistribution of use rights and improved high-altitude rangeland management in Bhutan.