diff --git a/doc/source/whatsnew/v0.18.1.txt b/doc/source/whatsnew/v0.18.1.txt
index a3e20879a2f58..f382efa90cbc0 100644
--- a/doc/source/whatsnew/v0.18.1.txt
+++ b/doc/source/whatsnew/v0.18.1.txt
@@ -93,3 +93,5 @@ Bug Fixes
 - Bug in ``value_counts`` when ``normalize=True`` and ``dropna=True`` where nulls still contributed to the normalized count (:issue:`12558`)
 
 - Bug in ``CategoricalIndex.get_loc`` returns different result from regular ``Index`` (:issue:`12531`)
+
+- Bug in ``Series`` when Series with Categorical is created with dtype specified (:issue:`12574`)
diff --git a/pandas/core/series.py b/pandas/core/series.py
index d339a93a3ed9b..649d5dbe8f384 100644
--- a/pandas/core/series.py
+++ b/pandas/core/series.py
@@ -195,9 +195,12 @@ def __init__(self, data=None, index=None, dtype=None, name=None,
                 else:
                     data = data.reindex(index, copy=copy)
             elif isinstance(data, Categorical):
-                if dtype is not None:
+                # GH12574: Allow dtype=category only, otherwise error
+                if ((dtype is not None) and
+                        not is_categorical_dtype(dtype)):
                     raise ValueError("cannot specify a dtype with a "
-                                     "Categorical")
+                                     "Categorical unless "
+                                     "dtype='category'")
             elif (isinstance(data, types.GeneratorType) or
                   (compat.PY3 and isinstance(data, map))):
                 data = list(data)
diff --git a/pandas/tests/series/test_constructors.py b/pandas/tests/series/test_constructors.py
index 43e47ae121408..356267630b274 100644
--- a/pandas/tests/series/test_constructors.py
+++ b/pandas/tests/series/test_constructors.py
@@ -139,6 +139,17 @@ def test_constructor_categorical(self):
         res = Series(cat)
         self.assertTrue(res.values.equals(cat))
 
+        # GH12574
+        self.assertRaises(
+            ValueError, lambda: Series(pd.Categorical([1, 2, 3]),
+                                       dtype='int64'))
+        cat = Series(pd.Categorical([1, 2, 3]), dtype='category')
+        self.assertTrue(com.is_categorical_dtype(cat))
+        self.assertTrue(com.is_categorical_dtype(cat.dtype))
+        s = Series([1, 2, 3], dtype='category')
+        self.assertTrue(com.is_categorical_dtype(s))
+        self.assertTrue(com.is_categorical_dtype(s.dtype))
+
     def test_constructor_maskedarray(self):
         data = ma.masked_all((3, ), dtype=float)
         result = Series(data)