diff --git a/doc/source/whatsnew/v1.2.1.rst b/doc/source/whatsnew/v1.2.1.rst
index 55fddb8b732e2..eb9fd89bc8b22 100644
--- a/doc/source/whatsnew/v1.2.1.rst
+++ b/doc/source/whatsnew/v1.2.1.rst
@@ -27,6 +27,7 @@ Fixed regressions
 - Fixed regression in :meth:`read_csv` and other read functions were the encoding error policy (``errors``) did not default to ``"replace"`` when no encoding was specified (:issue:`38989`)
 - Fixed regression in :meth:`DataFrame.replace` raising ``ValueError`` when :class:`DataFrame` has dtype ``bytes`` (:issue:`38900`)
 - Fixed regression in :meth:`DataFrameGroupBy.diff` raising for ``int8`` and ``int16`` columns (:issue:`39050`)
+- Fixed regression in :meth:`Series.fillna` that raised ``RecursionError`` with ``datetime64[ns, UTC]`` dtype (:issue:`38851`)
 - Fixed regression that raised ``AttributeError`` with PyArrow versions [0.16.0, 1.0.0) (:issue:`38801`)
 - Fixed regression in :meth:`DataFrame.groupby` when aggregating an :class:`ExtensionDType` that could fail for non-numeric values (:issue:`38980`)
 - Fixed regression in :meth:`DataFrame.loc.__setitem__` raising ``KeyError`` with :class:`MultiIndex` and list-like columns indexer enlarging :class:`DataFrame` (:issue:`39147`)
diff --git a/pandas/core/internals/blocks.py b/pandas/core/internals/blocks.py
index 2f3a06afa2a68..d6e6fcf158a07 100644
--- a/pandas/core/internals/blocks.py
+++ b/pandas/core/internals/blocks.py
@@ -1968,7 +1968,13 @@ class IntBlock(NumericBlock):
 class DatetimeLikeBlockMixin(HybridMixin, Block):
     """Mixin class for DatetimeBlock, DatetimeTZBlock, and TimedeltaBlock."""
 
-    _can_hold_na = True
+    @property
+    def _holder(self):
+        return DatetimeArray
+
+    @property
+    def fill_value(self):
+        return np.datetime64("NaT", "ns")
 
     def get_values(self, dtype: Optional[Dtype] = None):
         """
@@ -2052,8 +2058,10 @@ def where(self, other, cond, errors="raise", axis: int = 0) -> List["Block"]:
 class DatetimeBlock(DatetimeLikeBlockMixin):
     __slots__ = ()
     is_datetime = True
-    _holder = DatetimeArray
-    fill_value = np.datetime64("NaT", "ns")
+
+    @property
+    def _can_hold_na(self):
+        return True
 
     def _maybe_coerce_values(self, values):
         """
@@ -2099,18 +2107,18 @@ class DatetimeTZBlock(ExtensionBlock, DatetimeBlock):
     is_extension = True
 
     internal_values = Block.internal_values
-
-    _holder = DatetimeBlock._holder
     _can_hold_element = DatetimeBlock._can_hold_element
     to_native_types = DatetimeBlock.to_native_types
     diff = DatetimeBlock.diff
-    fillna = DatetimeBlock.fillna  # i.e. Block.fillna
-    fill_value = DatetimeBlock.fill_value
-    _can_hold_na = DatetimeBlock._can_hold_na
+    fill_value = np.datetime64("NaT", "ns")
     where = DatetimeBlock.where
 
     array_values = ExtensionBlock.array_values
 
+    @property
+    def _holder(self):
+        return DatetimeArray
+
     def _maybe_coerce_values(self, values):
         """
         Input validation for values passed to __init__. Ensure that
@@ -2175,6 +2183,17 @@ def external_values(self):
         #  return an object-dtype ndarray of Timestamps.
         return np.asarray(self.values.astype("datetime64[ns]", copy=False))
 
+    def fillna(self, value, limit=None, inplace=False, downcast=None):
+        # We support filling a DatetimeTZ with a `value` whose timezone
+        # is different by coercing to object.
+        if self._can_hold_element(value):
+            return super().fillna(value, limit, inplace, downcast)
+
+        # different timezones, or a non-tz
+        return self.astype(object).fillna(
+            value, limit=limit, inplace=inplace, downcast=downcast
+        )
+
     def quantile(self, qs, interpolation="linear", axis=0):
         naive = self.values.view("M8[ns]")
 
@@ -2211,9 +2230,11 @@ def _check_ndim(self, values, ndim):
         return ndim
 
 
-class TimeDeltaBlock(DatetimeLikeBlockMixin):
+class TimeDeltaBlock(DatetimeLikeBlockMixin, IntBlock):
     __slots__ = ()
     is_timedelta = True
+    _can_hold_na = True
+    is_numeric = False
     fill_value = np.timedelta64("NaT", "ns")
 
     def _maybe_coerce_values(self, values):
diff --git a/pandas/core/internals/managers.py b/pandas/core/internals/managers.py
index cc5576719ff43..c7d419840fb13 100644
--- a/pandas/core/internals/managers.py
+++ b/pandas/core/internals/managers.py
@@ -1891,7 +1891,7 @@ def _consolidate(blocks):
         merged_blocks = _merge_blocks(
             list(group_blocks), dtype=dtype, can_consolidate=_can_consolidate
         )
-        new_blocks.extend(merged_blocks)
+        new_blocks = extend_blocks(merged_blocks, new_blocks)
     return new_blocks
 
 
diff --git a/pandas/tests/series/methods/test_fillna.py b/pandas/tests/series/methods/test_fillna.py
index 3fa411b421015..69a9a81e66ac4 100644
--- a/pandas/tests/series/methods/test_fillna.py
+++ b/pandas/tests/series/methods/test_fillna.py
@@ -1,4 +1,4 @@
-from datetime import datetime, timedelta
+from datetime import datetime, timedelta, timezone
 
 import numpy as np
 import pytest
@@ -13,6 +13,7 @@
     Series,
     Timedelta,
     Timestamp,
+    date_range,
     isna,
 )
 import pandas._testing as tm
@@ -724,6 +725,14 @@ def test_fillna_method_and_limit_invalid(self):
                 with pytest.raises(ValueError, match=msg):
                     ser.fillna(1, limit=limit, method=method)
 
+    def test_fillna_datetime64_with_timezone_tzinfo(self):
+        # https://github.com/pandas-dev/pandas/issues/38851
+        s = Series(date_range("2020", periods=3, tz="UTC"))
+        expected = s.astype(object)
+        s[1] = NaT
+        result = s.fillna(datetime(2020, 1, 2, tzinfo=timezone.utc))
+        tm.assert_series_equal(result, expected)
+
 
 class TestFillnaPad:
     def test_fillna_bug(self):