When showing list of content (i.e. Posts, Custom Post Type) on Category Page, the main $WP_Query renders posts of default Posts type. To show content from different post type we've to alter the main $WP_Query. There are few different ways using which we can alter the $WP_Query. But here is one of the way to alter $WP_Query without removing existing conditions in Query.
<?php
  // Define global variable.
  global $wp_query;

  // Define arguments to alter query.
  $args = array(
    'post_status' => 'publish',
    'post_type' => 'CUSTOM_POST_TYPE',
  );

  // Add extra conditions to existing query.
  query_posts(array_merge($wp_query->query_vars, $args));
?>

The above code uses query_posts() function, to alter existing $WP_Query. To alter the existing Query, I've merged $WP_Query->query_vars and new filter conditions and then pass that to query_posts function. NOTE: Add your custom post type name instead of CUSTOM_POST_TYPE, in post_type. I've found this way very easy to understand and this also works fine with default pagination.

Reference:

Submitted by ychaugule on