diff --git a/doc/source/whatsnew/v2.2.0.rst b/doc/source/whatsnew/v2.2.0.rst
index 0fc4afc95a2ce..24bed22b3a3fe 100644
--- a/doc/source/whatsnew/v2.2.0.rst
+++ b/doc/source/whatsnew/v2.2.0.rst
@@ -266,6 +266,7 @@ Interval
 Indexing
 ^^^^^^^^
 - Bug in :meth:`Index.difference` not returning a unique set of values when ``other`` is empty or ``other`` is considered non-comparable (:issue:`55113`)
+- Bug in setting :class:`Categorical` values into a :class:`DataFrame` with numpy dtypes raising ``RecursionError`` (:issue:`52927`)
 -
 
 Missing
diff --git a/pandas/core/dtypes/cast.py b/pandas/core/dtypes/cast.py
index 1d5db123068e2..74e785be06356 100644
--- a/pandas/core/dtypes/cast.py
+++ b/pandas/core/dtypes/cast.py
@@ -68,6 +68,7 @@
     PeriodDtype,
 )
 from pandas.core.dtypes.generic import (
+    ABCExtensionArray,
     ABCIndex,
     ABCSeries,
 )
@@ -1772,6 +1773,23 @@ def np_can_hold_element(dtype: np.dtype, element: Any) -> Any:
                         return casted
                     raise LossySetitemError
 
+                elif isinstance(element, ABCExtensionArray) and isinstance(
+                    element.dtype, CategoricalDtype
+                ):
+                    # GH#52927 setting Categorical value into non-EA frame
+                    # TODO: general-case for EAs?
+                    try:
+                        casted = element.astype(dtype)
+                    except (ValueError, TypeError):
+                        raise LossySetitemError
+                    # Check for cases of either
+                    #  a) lossy overflow/rounding or
+                    #  b) semantic changes like dt64->int64
+                    comp = casted == element
+                    if not comp.all():
+                        raise LossySetitemError
+                    return casted
+
                 # Anything other than integer we cannot hold
                 raise LossySetitemError
             if (
diff --git a/pandas/core/internals/blocks.py b/pandas/core/internals/blocks.py
index 66b01dfb59f7f..30f6507d02484 100644
--- a/pandas/core/internals/blocks.py
+++ b/pandas/core/internals/blocks.py
@@ -460,6 +460,12 @@ def coerce_to_target_dtype(self, other, warn_on_upcast: bool = False) -> Block:
         and will receive the same block
         """
         new_dtype = find_result_type(self.values.dtype, other)
+        if new_dtype == self.dtype:
+            # GH#52927 avoid RecursionError
+            raise AssertionError(
+                "Something has gone wrong, please report a bug at "
+                "https://github.com/pandas-dev/pandas/issues"
+            )
 
         # In a future version of pandas, the default will be that
         # setting `nan` into an integer series won't raise.
diff --git a/pandas/tests/indexing/test_loc.py b/pandas/tests/indexing/test_loc.py
index d0b6adfda0241..a2693c85e507f 100644
--- a/pandas/tests/indexing/test_loc.py
+++ b/pandas/tests/indexing/test_loc.py
@@ -1657,6 +1657,14 @@ def test_loc_setitem_range_key(self, frame_or_series):
         expected = frame_or_series([0, 1, 10, 9, 11], index=obj.index)
         tm.assert_equal(obj, expected)
 
+    def test_loc_setitem_numpy_frame_categorical_value(self):
+        # GH#52927
+        df = DataFrame({"a": [1, 1, 1, 1, 1], "b": ["a", "a", "a", "a", "a"]})
+        df.loc[1:2, "a"] = Categorical([2, 2], categories=[1, 2])
+
+        expected = DataFrame({"a": [1, 2, 2, 1, 1], "b": ["a", "a", "a", "a", "a"]})
+        tm.assert_frame_equal(df, expected)
+
 
 class TestLocWithEllipsis:
     @pytest.fixture(params=[tm.loc, tm.iloc])