diff --git a/doc/source/whatsnew/v2.1.2.rst b/doc/source/whatsnew/v2.1.2.rst
index 2c9b10160d144..bbf7368513fd4 100644
--- a/doc/source/whatsnew/v2.1.2.rst
+++ b/doc/source/whatsnew/v2.1.2.rst
@@ -29,7 +29,7 @@ Bug fixes
 
 Other
 ~~~~~
--
+- Changed the ``FutureWarning`` raised when ``observed=False`` in :meth:`DataFrame.groupby` and :meth:`Series.groupby` to a ``DeprecationWarning`` (:issue:`54970`)
 -
 
 .. ---------------------------------------------------------------------------
diff --git a/pandas/core/groupby/groupby.py b/pandas/core/groupby/groupby.py
index d607baf18d6cb..942358b6db3de 100644
--- a/pandas/core/groupby/groupby.py
+++ b/pandas/core/groupby/groupby.py
@@ -1322,7 +1322,7 @@ def __init__(
                     "to True in a future version of pandas. Pass observed=False to "
                     "retain current behavior or observed=True to adopt the future "
                     "default and silence this warning.",
-                    FutureWarning,
+                    DeprecationWarning,
                     stacklevel=find_stack_level(),
                 )
             observed = False
diff --git a/pandas/tests/groupby/test_categorical.py b/pandas/tests/groupby/test_categorical.py
index b11240c841420..cb083eed4c2fc 100644
--- a/pandas/tests/groupby/test_categorical.py
+++ b/pandas/tests/groupby/test_categorical.py
@@ -2080,7 +2080,7 @@ def test_groupby_default_depr(cat_columns, keys):
     df = DataFrame({"a": [1, 1, 2, 3], "b": [4, 5, 6, 7]})
     df[cat_columns] = df[cat_columns].astype("category")
     msg = "The default of observed=False is deprecated"
-    klass = FutureWarning if set(cat_columns) & set(keys) else None
+    klass = DeprecationWarning if set(cat_columns) & set(keys) else None
     with tm.assert_produces_warning(klass, match=msg):
         df.groupby(keys)