diff --git a/pandas/_libs/internals.pyx b/pandas/_libs/internals.pyx
index 4f27fde52414a..006fd34632d5a 100644
--- a/pandas/_libs/internals.pyx
+++ b/pandas/_libs/internals.pyx
@@ -207,7 +207,7 @@ cdef slice slice_canonize(slice s):
     Convert slice to canonical bounded form.
     """
     cdef:
-        Py_ssize_t start = 0, stop = 0, step = 1, length
+        Py_ssize_t start = 0, stop = 0, step = 1
 
     if s.step is None:
         step = 1
@@ -239,7 +239,7 @@ cdef slice slice_canonize(slice s):
             if stop > start:
                 stop = start
 
-    if start < 0 or (stop < 0 and s.stop is not None):
+    if start < 0 or (stop < 0 and s.stop is not None and step > 0):
         raise ValueError("unbounded slice")
 
     if stop < 0:
diff --git a/pandas/tests/internals/test_internals.py b/pandas/tests/internals/test_internals.py
index 689cdbce103e6..8ee84803339df 100644
--- a/pandas/tests/internals/test_internals.py
+++ b/pandas/tests/internals/test_internals.py
@@ -922,6 +922,13 @@ def test_zero_step_raises(self, slc):
         with pytest.raises(ValueError, match=msg):
             BlockPlacement(slc)
 
+    def test_slice_canonize_negative_stop(self):
+        # GH#37524 negative stop is OK with negative step and positive start
+        slc = slice(3, -1, -2)
+
+        bp = BlockPlacement(slc)
+        assert bp.indexer == slice(3, None, -2)
+
     @pytest.mark.parametrize(
         "slc",
         [