We investigate the effects of Pauli blocking on thermalization process of relativistic plasma by solving relativistic Uehling-Uhlenbeck equations with QED collision integral for all binary and triple processes. With this purpose we consider nonequilibrium initial state of plasma to be strongly degenerate. We found that when electron-positron annihilation is active, initial plasma degeneracy is quickly destroyed. As a result in a wide range of final temperatures ranging from nonrelativistic to mildly relativistic $0.1 m_e c^2 leq k_B Tleq 10 m_e c^2$ thermalization is not affected by Pauli blocking. Conversely, when electron-positron annihilation process is inactive, thermalization process in such degenerate plasma is strongly affected by Pauli blocking. This is possible either in a nonrelativistic plasma, with equilibrium temperature $k_B Tleq 0.3 m_e c^2$, or in photon-electron plasma. In these cases all reaction rates are strongly suppressed by Pauli blocking and thermalization does not occur until electrons can populate energy states above the Fermi energy. Soon after this happens thermalization proceeds suddenly in an avalanche-like process.