diff --git a/h2o-py/h2o/frame.py b/h2o-py/h2o/frame.py
index 235a69b6c302..e026cb5e9203 100644
--- a/h2o-py/h2o/frame.py
+++ b/h2o-py/h2o/frame.py
@@ -3182,9 +3182,16 @@ def cor(self, y=None, na_rm=False, use=None, method="Pearson"):
         assert_is_type(y, H2OFrame, None)
         assert_is_type(na_rm, bool)
         assert_is_type(use, None, "everything", "all.obs", "complete.obs")
-        if y is None:
-            y = self
-        if use is None: use = "complete.obs" if na_rm else "everything"
+        y_categorical = any(self.types[col_name] == "enum" for col_name in y)
+
+        if y_categorical:
+            num_unique_levels = {col: len(self[col].levels()) for col in y}
+            multi_categorical = any(num_levels > 2 for num_levels in num_unique_levels.values())
+
+        if multi_categorical:
+            import warnings
+            warnings.warn("NA")
+
         if self.nrow == 1 or (self.ncol == 1 and y.ncol == 1): return ExprNode("cor", self, y, use, method)._eager_scalar()
         return H2OFrame._expr(expr=ExprNode("cor", self, y, use, method))._frame()
 
diff --git a/h2o-r/h2o-package/R/frame.R b/h2o-r/h2o-package/R/frame.R
index e90e1e564029..4f627d183847 100644
--- a/h2o-r/h2o-package/R/frame.R
+++ b/h2o-r/h2o-package/R/frame.R
@@ -2880,25 +2880,36 @@ var <- function(x, y = NULL, na.rm = FALSE, use)  {
 #' cor(prostate$AGE)
 #' }
 #' @export
-h2o.cor <- function(x, y=NULL,na.rm = FALSE, use, method="Pearson"){
+h2o.cor <- function(x, y = NULL, na.rm = FALSE, use, method = "Pearson") {
   # Eager, mostly to match prior semantics but no real reason it need to be
-  if( is.null(y) ){
+  if (is.null(y)) {
     y <- x
   }
-  if(missing(use)) {
+  if (missing(use)) {
     if (na.rm) use <- "complete.obs" else use <- "everything"
   }
   
   if (is.null(method) || is.na(method)) {
     stop("Correlation method must be specified.")
   }
+
+  # Check for categorical columns in x and y
+  x_categorical <- any(h2o.isfactor(x))
+  y_categorical <- any(h2o.isfactor(y))
   
+  if ((x_categorical && length(unique(h2o.levels(x))) > 2) || (y_categorical && length(unique(h2o.levels(y))) > 2)) {
+      warning("NA")
+  }
+
+
   # Eager, mostly to match prior semantics but no real reason it need to be
-  expr <- .newExpr("cor",x,y,.quote(use), .quote(method))
-  if( (nrow(x)==1L || (ncol(x)==1L && ncol(y)==1L)) ) .eval.scalar(expr)
-  else .fetch.data(expr,ncol(x))
+  expr <- .newExpr("cor", x, y, .quote(use), .quote(method))
+  if ((nrow(x) == 1L || (ncol(x) == 1L && ncol(y) == 1L))) .eval.scalar(expr)
+  else .fetch.data(expr, ncol(x))
 }
 
+
+
 #'
 #' Compute a pairwise distance measure between all rows of two numeric H2OFrames.
 #'