diff --git a/pyiceberg/utils/config.py b/pyiceberg/utils/config.py
index 31ba0b36ed..e038005469 100644
--- a/pyiceberg/utils/config.py
+++ b/pyiceberg/utils/config.py
@@ -125,8 +125,8 @@ def set_property(_config: RecursiveDict, path: List[str], config_value: str) ->
             env_var_lower = env_var.lower()
             if env_var_lower.startswith(PYICEBERG.lower()):
                 key = env_var_lower[len(PYICEBERG) :]
-                parts = key.split("__")
-                parts_normalized = [part.replace("_", "-") for part in parts]
+                parts = key.split("__", maxsplit=2)
+                parts_normalized = [part.replace('__', '.').replace("_", "-") for part in parts]
                 set_property(config, parts_normalized, config_value)
 
         return config
diff --git a/tests/utils/test_config.py b/tests/utils/test_config.py
index d694e15562..5e3f72ccc6 100644
--- a/tests/utils/test_config.py
+++ b/tests/utils/test_config.py
@@ -41,6 +41,20 @@ def test_from_environment_variables_uppercase() -> None:
     assert Config().get_catalog_config("PRODUCTION") == {"uri": "https://service.io/api"}
 
 
+@mock.patch.dict(
+    os.environ,
+    {
+        "PYICEBERG_CATALOG__PRODUCTION__S3__REGION": "eu-north-1",
+        "PYICEBERG_CATALOG__PRODUCTION__S3__ACCESS_KEY_ID": "username",
+    },
+)
+def test_fix_nested_objects_from_environment_variables() -> None:
+    assert Config().get_catalog_config("PRODUCTION") == {
+        's3.region': 'eu-north-1',
+        's3.access-key-id': 'username',
+    }
+
+
 def test_from_configuration_files(tmp_path_factory: pytest.TempPathFactory) -> None:
     config_path = str(tmp_path_factory.mktemp("config"))
     with open(f"{config_path}/.pyiceberg.yaml", "w", encoding=UTF8) as file: