diff --git a/doc/source/whatsnew/v1.1.3.rst b/doc/source/whatsnew/v1.1.3.rst
index 8ead78a17e9c2..2cf93667354d0 100644
--- a/doc/source/whatsnew/v1.1.3.rst
+++ b/doc/source/whatsnew/v1.1.3.rst
@@ -29,6 +29,7 @@ Bug fixes
 - Bug in :func:`read_spss` where passing a ``pathlib.Path`` as ``path`` would raise a ``TypeError`` (:issue:`33666`)
 - Bug in :meth:`Series.str.startswith` and :meth:`Series.str.endswith` with ``category`` dtype not propagating ``na`` parameter (:issue:`36241`)
 - Bug in :class:`Series` constructor where integer overflow would occur for sufficiently large scalar inputs when an index was provided (:issue:`36291`)
+- Bug in :meth:`DataFrame.sort_values` raising an ``AttributeError`` when sorting on a key that casts column to categorical dtype (:issue:`36383`)
 - Bug in :meth:`DataFrame.stack` raising a ``ValueError`` when stacking :class:`MultiIndex` columns based on position when the levels had duplicate names (:issue:`36353`)
 
 .. ---------------------------------------------------------------------------
diff --git a/pandas/core/sorting.py b/pandas/core/sorting.py
index dd6aadf570baa..ec62192464665 100644
--- a/pandas/core/sorting.py
+++ b/pandas/core/sorting.py
@@ -20,7 +20,6 @@
 from pandas.core.dtypes.common import (
     ensure_int64,
     ensure_platform_int,
-    is_categorical_dtype,
     is_extension_array_dtype,
 )
 from pandas.core.dtypes.generic import ABCMultiIndex
@@ -294,13 +293,7 @@ def lexsort_indexer(
     keys = [ensure_key_mapped(k, key) for k in keys]
 
     for k, order in zip(keys, orders):
-        # we are already a Categorical
-        if is_categorical_dtype(k):
-            cat = k
-
-        # create the Categorical
-        else:
-            cat = Categorical(k, ordered=True)
+        cat = Categorical(k, ordered=True)
 
         if na_position not in ["last", "first"]:
             raise ValueError(f"invalid na_position: {na_position}")
diff --git a/pandas/tests/frame/methods/test_sort_values.py b/pandas/tests/frame/methods/test_sort_values.py
index c60e7e3b1bdb6..0ca232ec433e7 100644
--- a/pandas/tests/frame/methods/test_sort_values.py
+++ b/pandas/tests/frame/methods/test_sort_values.py
@@ -691,3 +691,23 @@ def test_sort_values_key_dict_axis(self):
         result = df.sort_values(1, key=lambda col: -col, axis=1)
         expected = df.loc[:, ::-1]
         tm.assert_frame_equal(result, expected)
+
+    @pytest.mark.parametrize("ordered", [True, False])
+    def test_sort_values_key_casts_to_categorical(self, ordered):
+        # https://github.com/pandas-dev/pandas/issues/36383
+        categories = ["c", "b", "a"]
+        df = pd.DataFrame({"x": [1, 1, 1], "y": ["a", "b", "c"]})
+
+        def sorter(key):
+            if key.name == "y":
+                return pd.Series(
+                    pd.Categorical(key, categories=categories, ordered=ordered)
+                )
+            return key
+
+        result = df.sort_values(by=["x", "y"], key=sorter)
+        expected = pd.DataFrame(
+            {"x": [1, 1, 1], "y": ["c", "b", "a"]}, index=pd.Index([2, 1, 0])
+        )
+
+        tm.assert_frame_equal(result, expected)