diff --git a/doc/source/whatsnew/v1.3.2.rst b/doc/source/whatsnew/v1.3.2.rst
index f4804215db8c1..94d62ae988f0c 100644
--- a/doc/source/whatsnew/v1.3.2.rst
+++ b/doc/source/whatsnew/v1.3.2.rst
@@ -18,6 +18,7 @@ Fixed regressions
 - Regression in updating values of :class:`pandas.Series` using boolean index, created by using :meth:`pandas.DataFrame.pop` (:issue:`42530`)
 - Regression in :meth:`DataFrame.from_records` with empty records (:issue:`42456`)
 - Fixed regression in :meth:`DataFrame.shift` where TypeError occurred when shifting DataFrame created by concatenation of slices and fills with values (:issue:`42719`)
+- Regression in :meth:`DataFrame.agg` when the ``func`` argument returned lists and ``axis=1`` (:issue:`42727`)
 -
 
 .. ---------------------------------------------------------------------------
diff --git a/pandas/core/apply.py b/pandas/core/apply.py
index ff3fc30b870dc..bb39e18caeaa2 100644
--- a/pandas/core/apply.py
+++ b/pandas/core/apply.py
@@ -690,21 +690,28 @@ def agg(self):
         obj = self.obj
         axis = self.axis
 
+        # TODO: Avoid having to change state
+        self.obj = self.obj if self.axis == 0 else self.obj.T
+        self.axis = 0
+
+        result = None
+        try:
+            result = super().agg()
+        except TypeError as err:
+            exc = TypeError(
+                "DataFrame constructor called with "
+                f"incompatible data and dtype: {err}"
+            )
+            raise exc from err
+        finally:
+            self.obj = obj
+            self.axis = axis
+
         if axis == 1:
-            result = FrameRowApply(
-                obj.T,
-                self.orig_f,
-                self.raw,
-                self.result_type,
-                self.args,
-                self.kwargs,
-            ).agg()
             result = result.T if result is not None else result
-        else:
-            result = super().agg()
 
         if result is None:
-            result = obj.apply(self.orig_f, axis, args=self.args, **self.kwargs)
+            result = self.obj.apply(self.orig_f, axis, args=self.args, **self.kwargs)
 
         return result
 
diff --git a/pandas/tests/apply/test_frame_apply.py b/pandas/tests/apply/test_frame_apply.py
index 801cbdf3d0a87..62983b5327a26 100644
--- a/pandas/tests/apply/test_frame_apply.py
+++ b/pandas/tests/apply/test_frame_apply.py
@@ -644,13 +644,14 @@ def test_apply_dup_names_multi_agg():
     tm.assert_frame_equal(result, expected)
 
 
-def test_apply_nested_result_axis_1():
+@pytest.mark.parametrize("op", ["apply", "agg"])
+def test_apply_nested_result_axis_1(op):
     # GH 13820
     def apply_list(row):
         return [2 * row["A"], 2 * row["C"], 2 * row["B"]]
 
     df = DataFrame(np.zeros((4, 4)), columns=list("ABCD"))
-    result = df.apply(apply_list, axis=1)
+    result = getattr(df, op)(apply_list, axis=1)
     expected = Series(
         [[0.0, 0.0, 0.0], [0.0, 0.0, 0.0], [0.0, 0.0, 0.0], [0.0, 0.0, 0.0]]
     )