diff --git a/doc/source/whatsnew/v0.23.2.txt b/doc/source/whatsnew/v0.23.2.txt
index 5b3e607956f7a..c908d29716a7d 100644
--- a/doc/source/whatsnew/v0.23.2.txt
+++ b/doc/source/whatsnew/v0.23.2.txt
@@ -81,6 +81,7 @@ Bug Fixes
 
 **Categorical**
 
+- Bug in rendering :class:`Series` with ``Categorical`` dtype in rare conditions under Python 2.7 (:issue:`21002`)
 -
 
 **Timezones**
diff --git a/pandas/_libs/hashing.pyx b/pandas/_libs/hashing.pyx
index c6f182ac5003f..4489847518a1d 100644
--- a/pandas/_libs/hashing.pyx
+++ b/pandas/_libs/hashing.pyx
@@ -8,8 +8,7 @@ import numpy as np
 from numpy cimport ndarray, uint8_t, uint32_t, uint64_t
 
 from util cimport _checknull
-from cpython cimport (PyString_Check,
-                      PyBytes_Check,
+from cpython cimport (PyBytes_Check,
                       PyUnicode_Check)
 from libc.stdlib cimport malloc, free
 
@@ -62,9 +61,7 @@ def hash_object_array(ndarray[object] arr, object key, object encoding='utf8'):
     cdef list datas = []
     for i in range(n):
         val = arr[i]
-        if PyString_Check(val):
-            data = <bytes>val.encode(encoding)
-        elif PyBytes_Check(val):
+        if PyBytes_Check(val):
             data = <bytes>val
         elif PyUnicode_Check(val):
             data = <bytes>val.encode(encoding)
diff --git a/pandas/tests/series/test_repr.py b/pandas/tests/series/test_repr.py
index 97236f028b1c4..730c2b7865f1f 100644
--- a/pandas/tests/series/test_repr.py
+++ b/pandas/tests/series/test_repr.py
@@ -11,6 +11,7 @@
 from pandas import (Index, Series, DataFrame, date_range, option_context,
                     Categorical, period_range, timedelta_range)
 from pandas.core.index import MultiIndex
+from pandas.core.base import StringMixin
 
 from pandas.compat import lrange, range, u
 from pandas import compat
@@ -202,6 +203,35 @@ def test_latex_repr(self):
 
 class TestCategoricalRepr(object):
 
+    def test_categorical_repr_unicode(self):
+        # GH#21002 if len(index) > 60, sys.getdefaultencoding()=='ascii',
+        # and we are working in PY2, then rendering a Categorical could raise
+        # UnicodeDecodeError by trying to decode when it shouldn't
+
+        class County(StringMixin):
+            name = u'San Sebastián'
+            state = u'PR'
+
+            def __unicode__(self):
+                return self.name + u', ' + self.state
+
+        cat = pd.Categorical([County() for n in range(61)])
+        idx = pd.Index(cat)
+        ser = idx.to_series()
+
+        if compat.PY3:
+            # no reloading of sys, just check that the default (utf8) works
+            # as expected
+            repr(ser)
+            str(ser)
+
+        else:
+            # set sys.defaultencoding to ascii, then change it back after
+            # the test
+            with tm.set_defaultencoding('ascii'):
+                repr(ser)
+                str(ser)
+
     def test_categorical_repr(self):
         a = Series(Categorical([1, 2, 3, 4]))
         exp = u("0    1\n1    2\n2    3\n3    4\n" +
diff --git a/pandas/util/testing.py b/pandas/util/testing.py
index d26a2116fb3ce..b9e53dfc80020 100644
--- a/pandas/util/testing.py
+++ b/pandas/util/testing.py
@@ -553,6 +553,28 @@ def _valid_locales(locales, normalize):
 # Stdout / stderr decorators
 
 
+@contextmanager
+def set_defaultencoding(encoding):
+    """
+    Set default encoding (as given by sys.getdefaultencoding()) to the given
+    encoding; restore on exit.
+
+    Parameters
+    ----------
+    encoding : str
+    """
+    if not PY2:
+        raise ValueError("set_defaultencoding context is only available "
+                         "in Python 2.")
+    orig = sys.getdefaultencoding()
+    reload(sys)  # noqa:F821
+    sys.setdefaultencoding(encoding)
+    try:
+        yield
+    finally:
+        sys.setdefaultencoding(orig)
+
+
 def capture_stdout(f):
     """
     Decorator to capture stdout in a buffer so that it can be checked