diff --git a/doc/source/release.rst b/doc/source/release.rst
index 6e10bd651d90a..19639e2e759e1 100644
--- a/doc/source/release.rst
+++ b/doc/source/release.rst
@@ -660,7 +660,7 @@ Bug Fixes
     the ``by`` argument was passed (:issue:`4112`, :issue:`4113`).
   - Fixed a bug in ``convert_objects`` for > 2 ndims (:issue:`4937`)
   - Fixed a bug in DataFrame/Panel cache insertion and subsequent indexing
-    (:issue:`4939`)
+    (:issue:`4939`, :issue:`5424`)
   - Fixed string methods for ``FrozenNDArray`` and ``FrozenList``
     (:issue:`4929`)
   - Fixed a bug with setting invalid or out-of-range values in indexing
diff --git a/pandas/core/indexing.py b/pandas/core/indexing.py
index 0bc0afaf255f2..c854e0b086994 100644
--- a/pandas/core/indexing.py
+++ b/pandas/core/indexing.py
@@ -189,9 +189,13 @@ def _setitem_with_indexer(self, indexer, value):
                         return self.obj
 
                     # reindex the axis
+                    # make sure to clear the cache because we are
+                    # just replacing the block manager here
+                    # so the object is the same
                     index = self.obj._get_axis(i)
                     labels = _safe_append_to_index(index, key)
                     self.obj._data = self.obj.reindex_axis(labels,i)._data
+                    self.obj._maybe_update_cacher(clear=True)
 
                     if isinstance(labels,MultiIndex):
                         self.obj.sortlevel(inplace=True)
@@ -223,7 +227,8 @@ def _setitem_with_indexer(self, indexer, value):
                     if len(self.obj.values):
                         new_values = np.concatenate([self.obj.values, new_values])
 
-                    self.obj._data = self.obj._constructor(new_values, index=new_index, name=self.obj.name)
+                    self.obj._data = self.obj._constructor(new_values,
+                                                           index=new_index, name=self.obj.name)._data
                     self.obj._maybe_update_cacher(clear=True)
                     return self.obj
 
diff --git a/pandas/tests/test_frame.py b/pandas/tests/test_frame.py
index b73c7cdbb8f87..6b487cb006a80 100644
--- a/pandas/tests/test_frame.py
+++ b/pandas/tests/test_frame.py
@@ -3539,24 +3539,6 @@ def test_operators_timedelta64(self):
         self.assertTrue(df['off1'].dtype == 'timedelta64[ns]')
         self.assertTrue(df['off2'].dtype == 'timedelta64[ns]')
 
-    def test__slice_consolidate_invalidate_item_cache(self):
-        # #3970
-        df = DataFrame({ "aa":lrange(5), "bb":[2.2]*5})
-
-        # Creates a second float block
-        df["cc"] = 0.0
-
-        # caches a reference to the 'bb' series
-        df["bb"]
-
-        # repr machinery triggers consolidation
-        repr(df)
-
-        # Assignment to wrong series
-        df['bb'].iloc[0] = 0.17
-        df._clear_item_cache()
-        self.assertAlmostEqual(df['bb'][0], 0.17)
-
     def test_new_empty_index(self):
         df1 = DataFrame(randn(0, 3))
         df2 = DataFrame(randn(0, 3))
diff --git a/pandas/tests/test_indexing.py b/pandas/tests/test_indexing.py
index 2cb26804ea4be..2ad9f10d1b990 100644
--- a/pandas/tests/test_indexing.py
+++ b/pandas/tests/test_indexing.py
@@ -1645,6 +1645,41 @@ def test_cache_updating(self):
         result = df.loc[(0,0),'z']
         self.assert_(result == 2)
 
+    def test_slice_consolidate_invalidate_item_cache(self):
+        # #3970
+        df = DataFrame({ "aa":lrange(5), "bb":[2.2]*5})
+
+        # Creates a second float block
+        df["cc"] = 0.0
+
+        # caches a reference to the 'bb' series
+        df["bb"]
+
+        # repr machinery triggers consolidation
+        repr(df)
+
+        # Assignment to wrong series
+        df['bb'].iloc[0] = 0.17
+        df._clear_item_cache()
+        self.assertAlmostEqual(df['bb'][0], 0.17)
+
+    def test_setitem_cache_updating(self):
+        # GH 5424
+        cont = ['one', 'two','three', 'four', 'five', 'six', 'seven']
+
+        for do_ref in [False,False]:
+            df = DataFrame({'a' : cont, "b":cont[3:]+cont[:3] ,'c' : np.arange(7)})
+
+            # ref the cache
+            if do_ref:
+                df.ix[0,"c"]
+
+            # set it
+            df.ix[7,'c'] = 1
+
+            self.assert_(df.ix[0,'c'] == 0.0)
+            self.assert_(df.ix[7,'c'] == 1.0)
+
     def test_floating_index_doc_example(self):
 
         index = Index([1.5, 2, 3, 4.5, 5])