diff --git a/doc/source/whatsnew/v2.0.0.rst b/doc/source/whatsnew/v2.0.0.rst
index 5b725eb4d2a98..92b76c62db8f7 100644
--- a/doc/source/whatsnew/v2.0.0.rst
+++ b/doc/source/whatsnew/v2.0.0.rst
@@ -878,6 +878,7 @@ Indexing
 ^^^^^^^^
 - Bug in :meth:`DataFrame.__setitem__` raising when indexer is a :class:`DataFrame` with ``boolean`` dtype (:issue:`47125`)
 - Bug in :meth:`DataFrame.reindex` filling with wrong values when indexing columns and index for ``uint`` dtypes (:issue:`48184`)
+- Bug in :meth:`DataFrame.loc` when setting :class:`DataFrame` with different dtypes coercing values to single dtype (:issue:`50467`)
 - Bug in :meth:`DataFrame.loc` coercing dtypes when setting values with a list indexer (:issue:`49159`)
 - Bug in :meth:`Series.loc` raising error for out of bounds end of slice indexer (:issue:`50161`)
 - Bug in :meth:`DataFrame.loc` raising ``ValueError`` with ``bool`` indexer and :class:`MultiIndex` (:issue:`47687`)
diff --git a/pandas/core/indexing.py b/pandas/core/indexing.py
index fa702770a0990..1b32c09bf4a25 100644
--- a/pandas/core/indexing.py
+++ b/pandas/core/indexing.py
@@ -1703,6 +1703,10 @@ def _setitem_with_indexer(self, indexer, value, name: str = "iloc"):
         # maybe partial set
         take_split_path = not self.obj._mgr.is_single_block
 
+        if not take_split_path and isinstance(value, ABCDataFrame):
+            # Avoid cast of values
+            take_split_path = not value._mgr.is_single_block
+
         # if there is only one block/type, still have to take split path
         # unless the block is one-dimensional or it can hold the value
         if not take_split_path and len(self.obj._mgr.arrays) and self.ndim > 1:
@@ -2055,7 +2059,7 @@ def _setitem_single_block(self, indexer, value, name: str) -> None:
             value = self._align_series(indexer, Series(value))
 
         elif isinstance(value, ABCDataFrame) and name != "iloc":
-            value = self._align_frame(indexer, value)
+            value = self._align_frame(indexer, value)._values
 
         # check for chained assignment
         self.obj._check_is_chained_assignment_possible()
@@ -2291,7 +2295,7 @@ def ravel(i):
 
         raise ValueError("Incompatible indexer with Series")
 
-    def _align_frame(self, indexer, df: DataFrame):
+    def _align_frame(self, indexer, df: DataFrame) -> DataFrame:
         is_frame = self.ndim == 2
 
         if isinstance(indexer, tuple):
@@ -2315,15 +2319,15 @@ def _align_frame(self, indexer, df: DataFrame):
             if idx is not None and cols is not None:
 
                 if df.index.equals(idx) and df.columns.equals(cols):
-                    val = df.copy()._values
+                    val = df.copy()
                 else:
-                    val = df.reindex(idx, columns=cols)._values
+                    val = df.reindex(idx, columns=cols)
                 return val
 
         elif (isinstance(indexer, slice) or is_list_like_indexer(indexer)) and is_frame:
             ax = self.obj.index[indexer]
             if df.index.equals(ax):
-                val = df.copy()._values
+                val = df.copy()
             else:
 
                 # we have a multi-index and are trying to align
@@ -2338,7 +2342,7 @@ def _align_frame(self, indexer, df: DataFrame):
                         "specifying the join levels"
                     )
 
-                val = df.reindex(index=ax)._values
+                val = df.reindex(index=ax)
             return val
 
         raise ValueError("Incompatible indexer with DataFrame")
diff --git a/pandas/tests/frame/indexing/test_indexing.py b/pandas/tests/frame/indexing/test_indexing.py
index c0b04b1f8e80f..63c3ba418591e 100644
--- a/pandas/tests/frame/indexing/test_indexing.py
+++ b/pandas/tests/frame/indexing/test_indexing.py
@@ -1494,6 +1494,15 @@ def test_loc_datetime_assignment_dtype_does_not_change(self, utc, indexer):
 
         tm.assert_frame_equal(df, expected)
 
+    @pytest.mark.parametrize("indexer, idx", [(tm.loc, 1), (tm.iloc, 2)])
+    def test_setitem_value_coercing_dtypes(self, indexer, idx):
+        # GH#50467
+        df = DataFrame([["1", np.nan], ["2", np.nan], ["3", np.nan]], dtype=object)
+        rhs = DataFrame([[1, np.nan], [2, np.nan]])
+        indexer(df)[:idx, :] = rhs
+        expected = DataFrame([[1, np.nan], [2, np.nan], ["3", np.nan]], dtype=object)
+        tm.assert_frame_equal(df, expected)
+
 
 class TestDataFrameIndexingUInt64:
     def test_setitem(self, uint64_frame):