diff --git a/doc/source/whatsnew/v1.2.3.rst b/doc/source/whatsnew/v1.2.3.rst
index 5ed8fd84472c4..d305024909703 100644
--- a/doc/source/whatsnew/v1.2.3.rst
+++ b/doc/source/whatsnew/v1.2.3.rst
@@ -16,7 +16,7 @@ Fixed regressions
 ~~~~~~~~~~~~~~~~~
 
 - Fixed regression in :meth:`~DataFrame.to_excel` raising ``KeyError`` when giving duplicate columns with ``columns`` attribute (:issue:`39695`)
--
+- Fixed regression in :meth:`DataFrame.__setitem__` not aligning :class:`DataFrame` on right-hand side for boolean indexer (:issue:`39931`)
 
 .. ---------------------------------------------------------------------------
 
diff --git a/pandas/core/frame.py b/pandas/core/frame.py
index 5b06059d4302c..131a96d10a6d0 100644
--- a/pandas/core/frame.py
+++ b/pandas/core/frame.py
@@ -3264,6 +3264,9 @@ def _setitem_array(self, key, value):
             key = check_bool_indexer(self.index, key)
             indexer = key.nonzero()[0]
             self._check_setitem_copy()
+            if isinstance(value, DataFrame):
+                # GH#39931 reindex since iloc does not align
+                value = value.reindex(self.index.take(indexer))
             self.iloc[indexer] = value
         else:
             if isinstance(value, DataFrame):
diff --git a/pandas/tests/frame/indexing/test_setitem.py b/pandas/tests/frame/indexing/test_setitem.py
index 6763113036de8..6a9d4e6b5ab3c 100644
--- a/pandas/tests/frame/indexing/test_setitem.py
+++ b/pandas/tests/frame/indexing/test_setitem.py
@@ -575,3 +575,12 @@ def test_setitem_boolean_mask(self, mask_type, float_frame):
         expected = df.copy()
         expected.values[np.array(mask)] = np.nan
         tm.assert_frame_equal(result, expected)
+
+    @pytest.mark.parametrize("indexer", [tm.setitem, tm.loc])
+    def test_setitem_boolean_mask_aligning(self, indexer):
+        # GH#39931
+        df = DataFrame({"a": [1, 4, 2, 3], "b": [5, 6, 7, 8]})
+        expected = df.copy()
+        mask = df["a"] >= 3
+        indexer(df)[mask] = indexer(df)[mask].sort_values("a")
+        tm.assert_frame_equal(df, expected)