diff --git a/pandas/tests/dtypes/test_dtypes.py b/pandas/tests/dtypes/test_dtypes.py
index 8ba8562affb67..410731820dc73 100644
--- a/pandas/tests/dtypes/test_dtypes.py
+++ b/pandas/tests/dtypes/test_dtypes.py
@@ -218,6 +218,12 @@ def test_repr_range_categories(self):
         expected = "CategoricalDtype(categories=range(0, 3), ordered=False)"
         assert result == expected
 
+    def test_update_dtype(self):
+        # GH 27338
+        result = CategoricalDtype(["a"]).update_dtype(Categorical(["b"], ordered=True))
+        expected = CategoricalDtype(["b"], ordered=True)
+        assert result == expected
+
 
 class TestDatetimeTZDtype(Base):
     @pytest.fixture
diff --git a/pandas/tests/series/methods/test_update.py b/pandas/tests/series/methods/test_update.py
index d00a4299cb690..51760c451ebca 100644
--- a/pandas/tests/series/methods/test_update.py
+++ b/pandas/tests/series/methods/test_update.py
@@ -108,3 +108,13 @@ def test_update_from_non_series(self, series, other, expected):
     def test_update_extension_array_series(self, result, target, expected):
         result.update(target)
         tm.assert_series_equal(result, expected)
+
+    def test_update_with_categorical_type(self):
+        # GH 25744
+        dtype = CategoricalDtype(["a", "b", "c", "d"])
+        s1 = Series(["a", "b", "c"], index=[1, 2, 3], dtype=dtype)
+        s2 = Series(["b", "a"], index=[1, 2], dtype=dtype)
+        s1.update(s2)
+        result = s1
+        expected = Series(["b", "a", "c"], index=[1, 2, 3], dtype=dtype)
+        tm.assert_series_equal(result, expected)