diff --git a/src/backend/distributed/commands/function.c b/src/backend/distributed/commands/function.c
index e688176bf..26dc5528e 100644
--- a/src/backend/distributed/commands/function.c
+++ b/src/backend/distributed/commands/function.c
@@ -16,21 +16,43 @@
  */
 
 #include "postgres.h"
+#include "funcapi.h"
 
+#include "access/htup_details.h"
 #include "access/xact.h"
 #include "catalog/namespace.h"
 #include "catalog/pg_proc.h"
 #include "distributed/commands.h"
+#include "catalog/pg_type.h"
+#include "distributed/colocation_utils.h"
+#include "distributed/master_protocol.h"
 #include "distributed/metadata_sync.h"
 #include "distributed/metadata/distobject.h"
+#include "distributed/metadata/pg_dist_object.h"
 #include "distributed/multi_executor.h"
 #include "distributed/relation_access_tracking.h"
 #include "distributed/worker_transaction.h"
 #include "utils/builtins.h"
 #include "utils/fmgrprotos.h"
+#include "utils/fmgroids.h"
+#include "utils/lsyscache.h"
+#include "utils/syscache.h"
+
+#define argumentStartsWith(arg, prefix) \
+	(strncmp(arg, prefix, strlen(prefix)) == 0)
 
 /* forward declaration for helper functions*/
 static char * GetFunctionDDLCommand(const RegProcedure funcOid);
+static int GetDistributionArgIndex(Oid functionOid, char *distributionArgumentName,
+								   Oid *distributionArgumentOid);
+static int GetFunctionColocationId(Oid functionOid, char *colocateWithName, Oid
+								   distributionArgumentOid);
+static void EnsureFunctionCanBeColocatedWithTable(Oid functionOid, Oid
+												  distributionColumnType, Oid
+												  sourceRelationId);
+static void UpdateFunctionDistributionInfo(const ObjectAddress *distAddress,
+										   int *distribution_argument_index,
+										   int *colocationId);
 static void EnsureSequentialModeForFunctionDDL(void);
 
 PG_FUNCTION_INFO_V1(create_distributed_function);
@@ -43,19 +65,57 @@ Datum
 create_distributed_function(PG_FUNCTION_ARGS)
 {
 	RegProcedure funcOid = PG_GETARG_OID(0);
+
+	text *distributionArgumentNameText = NULL; /* optional */
+	text *colocateWithText = NULL; /* optional */
+
 	const char *ddlCommand = NULL;
 	ObjectAddress functionAddress = { 0 };
 
+	int distributionArgumentIndex = -1;
+	Oid distributionArgumentOid = InvalidOid;
+	int colocationId = -1;
+
+	char *distributionArgumentName = NULL;
+	char *colocateWithTableName = NULL;
+
 	/* if called on NULL input, error out */
 	if (funcOid == InvalidOid)
 	{
-		ereport(ERROR, (errmsg("create_distributed_function() requires a single "
-							   "parameter that is a valid function or procedure name "
+		ereport(ERROR, (errmsg("the first parameter for create_distributed_function() "
+							   "should be a single a valid function or procedure name "
 							   "followed by a list of parameters in parantheses"),
 						errhint("skip the parameters with OUT argtype as they are not "
 								"part of the signature in PostgreSQL")));
 	}
 
+	if (PG_ARGISNULL(1))
+	{
+		/*
+		 * Using the  default value, so distribute the function but do not set
+		 * the  distribution argument.
+		 */
+		distributionArgumentName = NULL;
+	}
+	else
+	{
+		distributionArgumentNameText = PG_GETARG_TEXT_P(1);
+		distributionArgumentName = text_to_cstring(distributionArgumentNameText);
+	}
+
+	if (PG_ARGISNULL(2))
+	{
+		ereport(ERROR, (errmsg("colocate_with parameter should not be NULL"),
+						errhint("To use the default value, set colocate_with option "
+								"to \"default\"")));
+	}
+	else
+	{
+		colocateWithText = PG_GETARG_TEXT_P(2);
+		colocateWithTableName = text_to_cstring(colocateWithText);
+	}
+
+
 	ObjectAddressSet(functionAddress, ProcedureRelationId, funcOid);
 
 	/*
@@ -71,6 +131,42 @@ create_distributed_function(PG_FUNCTION_ARGS)
 
 	MarkObjectDistributed(&functionAddress);
 
+	if (distributionArgumentName == NULL)
+	{
+		/* cannot provide colocate_with without distribution_arg_name */
+		if (pg_strncasecmp(colocateWithTableName, "default", NAMEDATALEN) != 0)
+		{
+			char *functionName = get_func_name(funcOid);
+
+
+			ereport(ERROR, (errcode(ERRCODE_INVALID_PARAMETER_VALUE),
+							errmsg("cannot distribute the function \"%s\" since the "
+								   "distribution argument is not valid ", functionName),
+							errhint("To provide \"colocate_with\" option, the"
+									" distribution argument parameter should also "
+									"be provided")));
+		}
+
+		/* set distribution argument and colocationId to NULL */
+		UpdateFunctionDistributionInfo(&functionAddress, NULL, NULL);
+	}
+	else if (distributionArgumentName != NULL)
+	{
+		/* get the argument index, or error out if we cannot find a valid index */
+		distributionArgumentIndex =
+			GetDistributionArgIndex(funcOid, distributionArgumentName,
+									&distributionArgumentOid);
+
+		/* get the colocation id, or error out if we cannot find an appropriate one */
+		colocationId =
+			GetFunctionColocationId(funcOid, colocateWithTableName,
+									distributionArgumentOid);
+
+		/* if provided, make sure to record the distribution argument and colocationId */
+		UpdateFunctionDistributionInfo(&functionAddress, &distributionArgumentIndex,
+									   &colocationId);
+	}
+
 	PG_RETURN_VOID();
 }
 
@@ -91,6 +187,314 @@ CreateFunctionDDLCommandsIdempotent(const ObjectAddress *functionAddress)
 }
 
 
+/*
+ * GetDistributionArgIndex calculates the distribution argument with the given
+ * parameters. The function errors out if no valid argument is found.
+ */
+static int
+GetDistributionArgIndex(Oid functionOid, char *distributionArgumentName,
+						Oid *distributionArgumentOid)
+{
+	int distributionArgumentIndex = -1;
+
+	int numberOfArgs = 0;
+	int argIndex = 0;
+	Oid *argTypes = NULL;
+	char **argNames = NULL;
+	char *argModes = NULL;
+
+	HeapTuple proctup = NULL;
+
+	*distributionArgumentOid = InvalidOid;
+
+	proctup = SearchSysCache1(PROCOID, ObjectIdGetDatum(functionOid));
+	if (!HeapTupleIsValid(proctup))
+	{
+		elog(ERROR, "cache lookup failed for function %u", functionOid);
+	}
+
+	numberOfArgs = get_func_arg_info(proctup, &argTypes, &argNames, &argModes);
+
+	if (argumentStartsWith(distributionArgumentName, "$"))
+	{
+		/* skip the first character, we're safe because text_to_cstring pallocs */
+		distributionArgumentName++;
+
+		/* throws error if the input is not an integer */
+		distributionArgumentIndex = pg_atoi(distributionArgumentName, 4, 0);
+
+		if (distributionArgumentIndex < 1 || distributionArgumentIndex > numberOfArgs)
+		{
+			char *functionName = get_func_name(functionOid);
+
+			ereport(ERROR, (errcode(ERRCODE_INVALID_PARAMETER_VALUE),
+							errmsg("cannot distribute the function \"%s\" since "
+								   "the distribution argument is not valid",
+								   functionName),
+							errhint("Either provide a valid function argument name "
+									"or a valid \"$paramIndex\" to "
+									"create_distributed_function()")));
+		}
+
+		/*
+		 * Internal representation for the distributionArgumentIndex
+		 * starts from 0 whereas user facing API starts from 1.
+		 */
+		distributionArgumentIndex -= 1;
+		*distributionArgumentOid = argTypes[distributionArgumentIndex];
+
+		ReleaseSysCache(proctup);
+
+		Assert(*distributionArgumentOid != InvalidOid);
+
+		return distributionArgumentIndex;
+	}
+
+	/*
+	 * The user didn't provid "$paramIndex" but potentially the name of the paramater.
+	 * So, loop over the arguments and try to find the argument name that matches
+	 * the parameter that user provided.
+	 */
+	for (argIndex = 0; argIndex < numberOfArgs; ++argIndex)
+	{
+		char *argNameOnIndex = argNames != NULL ? argNames[argIndex] : NULL;
+
+		if (argNameOnIndex != NULL &&
+			pg_strncasecmp(argNameOnIndex, distributionArgumentName, NAMEDATALEN) == 0)
+		{
+			distributionArgumentIndex = argIndex;
+
+			*distributionArgumentOid = argTypes[argIndex];
+
+			/* we found, no need to continue */
+			break;
+		}
+	}
+
+	/* we still couldn't find the argument, so error out */
+	if (distributionArgumentIndex == -1)
+	{
+		char *functionName = get_func_name(functionOid);
+
+		ereport(ERROR, (errcode(ERRCODE_INVALID_PARAMETER_VALUE),
+						errmsg("cannot distribute the function \"%s\" since the "
+							   "distribution argument is not valid ", functionName),
+						errhint("Either provide a valid function argument name "
+								"or a valid \"$paramIndex\" to "
+								"create_distributed_function()")));
+	}
+
+	ReleaseSysCache(proctup);
+
+	Assert(*distributionArgumentOid != InvalidOid);
+
+	return distributionArgumentIndex;
+}
+
+
+/*
+ * GetFunctionColocationId gets the parameters for deciding the colocationId
+ * of the function that is being distributed. The function errors out if it is
+ * not possible to assign a colocationId to the input function.
+ */
+static int
+GetFunctionColocationId(Oid functionOid, char *colocateWithTableName,
+						Oid distributionArgumentOid)
+{
+	int colocationId = INVALID_COLOCATION_ID;
+	bool createdColocationGroup = false;
+
+	/*
+	 * Get an exclusive lock on the colocation system catalog. Therefore, we
+	 * can be sure that there will no modifications on the colocation table
+	 * until this transaction is committed.
+	 */
+	Relation pgDistColocation = heap_open(DistColocationRelationId(), ExclusiveLock);
+
+	if (pg_strncasecmp(colocateWithTableName, "default", NAMEDATALEN) == 0)
+	{
+		/* check for default colocation group */
+		colocationId = ColocationId(ShardCount, ShardReplicationFactor,
+									distributionArgumentOid);
+
+		if (colocationId == INVALID_COLOCATION_ID)
+		{
+			colocationId =
+				CreateColocationGroup(ShardCount, ShardReplicationFactor,
+									  distributionArgumentOid);
+
+			createdColocationGroup = true;
+		}
+	}
+	else
+	{
+		Oid sourceRelationId =
+			ResolveRelationId(cstring_to_text(colocateWithTableName), false);
+
+		EnsureFunctionCanBeColocatedWithTable(functionOid, distributionArgumentOid,
+											  sourceRelationId);
+
+		colocationId = TableColocationId(sourceRelationId);
+	}
+
+	/*
+	 * If we created a new colocation group then we need to keep the lock to
+	 * prevent a concurrent create_distributed_table call from creating another
+	 * colocation group with the same parameters. If we're using an existing
+	 * colocation group then other transactions will use the same one.
+	 */
+	if (createdColocationGroup)
+	{
+		/* keep the exclusive lock */
+		heap_close(pgDistColocation, NoLock);
+	}
+	else
+	{
+		/* release the exclusive lock */
+		heap_close(pgDistColocation, ExclusiveLock);
+	}
+
+
+	return colocationId;
+}
+
+
+/*
+ * EnsureFunctionCanBeColocatedWithTable checks whether the given arguments are
+ * suitable to distribute the function to be colocated with given source table.
+ */
+static void
+EnsureFunctionCanBeColocatedWithTable(Oid functionOid, Oid distributionColumnType,
+									  Oid sourceRelationId)
+{
+	DistTableCacheEntry *sourceTableEntry = DistributedTableCacheEntry(sourceRelationId);
+	char sourceDistributionMethod = sourceTableEntry->partitionMethod;
+	char sourceReplicationModel = sourceTableEntry->replicationModel;
+	Var *sourceDistributionColumn = DistPartitionKey(sourceRelationId);
+	Oid sourceDistributionColumnType = InvalidOid;
+
+	if (sourceDistributionMethod != DISTRIBUTE_BY_HASH)
+	{
+		char *functionName = get_func_name(functionOid);
+		char *sourceRelationName = get_rel_name(sourceRelationId);
+
+		ereport(ERROR, (errcode(ERRCODE_FEATURE_NOT_SUPPORTED),
+						errmsg("cannot colocate function \"%s\" and table \"%s\" because "
+							   "colocate_with option is only supported for hash "
+							   "distributed tables.", functionName,
+							   sourceRelationName)));
+	}
+
+	if (sourceReplicationModel != REPLICATION_MODEL_STREAMING)
+	{
+		char *functionName = get_func_name(functionOid);
+		char *sourceRelationName = get_rel_name(sourceRelationId);
+
+		ereport(ERROR, (errmsg("cannot colocate function \"%s\" and table \"%s\"",
+							   functionName, sourceRelationName),
+						errdetail("Citus currently only supports colocating function "
+								  "with distributed tables that are created using "
+								  "streaming replication model."),
+						errhint("When distributing tables make sure that "
+								"\"citus.replication_model\" is set to \"streaming\"")));
+	}
+
+	sourceDistributionColumnType = sourceDistributionColumn->vartype;
+	if (sourceDistributionColumnType != distributionColumnType)
+	{
+		char *functionName = get_func_name(functionOid);
+		char *sourceRelationName = get_rel_name(sourceRelationId);
+
+		ereport(ERROR, (errmsg("cannot colocate function \"%s\" and table \"%s\" "
+							   "because distribution column types don't match",
+							   sourceRelationName, functionName)));
+	}
+}
+
+
+/*
+ * UpdateFunctionDistributionInfo gets object address of a function and
+ * updates its distribution_argument_index and colocationId in pg_dist_object.
+ */
+static void
+UpdateFunctionDistributionInfo(const ObjectAddress *distAddress,
+							   int *distribution_argument_index,
+							   int *colocationId)
+{
+	const bool indexOK = true;
+
+	Relation pgDistObjectRel = NULL;
+	TupleDesc tupleDescriptor = NULL;
+	ScanKeyData scanKey[3];
+	SysScanDesc scanDescriptor = NULL;
+	HeapTuple heapTuple = NULL;
+	Datum values[Natts_pg_dist_object];
+	bool isnull[Natts_pg_dist_object];
+	bool replace[Natts_pg_dist_object];
+
+	pgDistObjectRel = heap_open(DistObjectRelationId(), RowExclusiveLock);
+	tupleDescriptor = RelationGetDescr(pgDistObjectRel);
+
+	/* scan pg_dist_object for classid = $1 AND objid = $2 AND objsubid = $3 via index */
+	ScanKeyInit(&scanKey[0], Anum_pg_dist_object_classid, BTEqualStrategyNumber, F_OIDEQ,
+				ObjectIdGetDatum(distAddress->classId));
+	ScanKeyInit(&scanKey[1], Anum_pg_dist_object_objid, BTEqualStrategyNumber, F_OIDEQ,
+				ObjectIdGetDatum(distAddress->objectId));
+	ScanKeyInit(&scanKey[2], Anum_pg_dist_object_objsubid, BTEqualStrategyNumber,
+				F_INT4EQ, ObjectIdGetDatum(distAddress->objectSubId));
+
+	scanDescriptor = systable_beginscan(pgDistObjectRel, DistObjectPrimaryKeyIndexId(),
+										indexOK,
+										NULL, 3, scanKey);
+
+	heapTuple = systable_getnext(scanDescriptor);
+	if (!HeapTupleIsValid(heapTuple))
+	{
+		ereport(ERROR, (errmsg("could not find valid entry for node \"%d,%d,%d\" "
+							   "in pg_dist_object", distAddress->classId,
+							   distAddress->objectId, distAddress->objectSubId)));
+	}
+
+	memset(replace, 0, sizeof(replace));
+
+	replace[Anum_pg_dist_object_distribution_argument_index - 1] = true;
+
+	if (distribution_argument_index != NULL)
+	{
+		values[Anum_pg_dist_object_distribution_argument_index - 1] = Int32GetDatum(
+			*distribution_argument_index);
+		isnull[Anum_pg_dist_object_distribution_argument_index - 1] = false;
+	}
+	else
+	{
+		isnull[Anum_pg_dist_object_distribution_argument_index - 1] = true;
+	}
+
+	replace[Anum_pg_dist_object_colocationid - 1] = true;
+	if (colocationId != NULL)
+	{
+		values[Anum_pg_dist_object_colocationid - 1] = Int32GetDatum(*colocationId);
+		isnull[Anum_pg_dist_object_colocationid - 1] = false;
+	}
+	else
+	{
+		isnull[Anum_pg_dist_object_colocationid - 1] = true;
+	}
+
+	heapTuple = heap_modify_tuple(heapTuple, tupleDescriptor, values, isnull, replace);
+
+	CatalogTupleUpdate(pgDistObjectRel, &heapTuple->t_self, heapTuple);
+
+	CitusInvalidateRelcacheByRelid(DistObjectRelationId());
+
+	CommandCounterIncrement();
+
+	systable_endscan(scanDescriptor);
+
+	heap_close(pgDistObjectRel, NoLock);
+}
+
+
 /*
  * GetFunctionDDLCommand returns the complete "CREATE OR REPLACE FUNCTION ..." statement for
  * the specified function.
diff --git a/src/backend/distributed/metadata/distobject.c b/src/backend/distributed/metadata/distobject.c
index 0e034bbb2..b9d23f950 100644
--- a/src/backend/distributed/metadata/distobject.c
+++ b/src/backend/distributed/metadata/distobject.c
@@ -37,7 +37,6 @@
 static int ExecuteCommandAsSuperuser(char *query, int paramCount, Oid *paramTypes,
 									 Datum *paramValues);
 
-
 PG_FUNCTION_INFO_V1(master_unmark_object_distributed);
 
 
@@ -151,7 +150,10 @@ MarkObjectDistributed(const ObjectAddress *distAddress)
 
 
 /*
- * ExecuteCommandAsSuperuser executes a command via SPI as superuser.
+ * ExecuteCommandAsSuperuser executes a command via SPI as superuser. Using this
+ * function (and in general SPI/SQL with superuser) should be avoided as much as
+ * possible. This is to prevent any user to exploit the superuser access via
+ * triggers.
  */
 static int
 ExecuteCommandAsSuperuser(char *query, int paramCount, Oid *paramTypes,
diff --git a/src/backend/distributed/sql/udfs/create_distributed_function/9.0-1.sql b/src/backend/distributed/sql/udfs/create_distributed_function/9.0-1.sql
index 8b7cc457b..aa43ad287 100644
--- a/src/backend/distributed/sql/udfs/create_distributed_function/9.0-1.sql
+++ b/src/backend/distributed/sql/udfs/create_distributed_function/9.0-1.sql
@@ -1,7 +1,11 @@
-CREATE OR REPLACE FUNCTION create_distributed_function(function_name regprocedure)
+CREATE OR REPLACE FUNCTION create_distributed_function(function_name regprocedure,
+						       distribution_arg_name text DEFAULT NULL,
+						       colocate_with text DEFAULT 'default')
   RETURNS void
   LANGUAGE C CALLED ON NULL INPUT
   AS 'MODULE_PATHNAME', $$create_distributed_function$$;
 
-COMMENT ON FUNCTION create_distributed_function(function_name regprocedure)
+COMMENT ON FUNCTION create_distributed_function(function_name regprocedure,
+						distribution_arg_name text,
+						colocate_with text)
   IS 'creates a distributed function';
diff --git a/src/backend/distributed/sql/udfs/create_distributed_function/latest.sql b/src/backend/distributed/sql/udfs/create_distributed_function/latest.sql
index 8b7cc457b..aa43ad287 100644
--- a/src/backend/distributed/sql/udfs/create_distributed_function/latest.sql
+++ b/src/backend/distributed/sql/udfs/create_distributed_function/latest.sql
@@ -1,7 +1,11 @@
-CREATE OR REPLACE FUNCTION create_distributed_function(function_name regprocedure)
+CREATE OR REPLACE FUNCTION create_distributed_function(function_name regprocedure,
+						       distribution_arg_name text DEFAULT NULL,
+						       colocate_with text DEFAULT 'default')
   RETURNS void
   LANGUAGE C CALLED ON NULL INPUT
   AS 'MODULE_PATHNAME', $$create_distributed_function$$;
 
-COMMENT ON FUNCTION create_distributed_function(function_name regprocedure)
+COMMENT ON FUNCTION create_distributed_function(function_name regprocedure,
+						distribution_arg_name text,
+						colocate_with text)
   IS 'creates a distributed function';
diff --git a/src/test/regress/expected/distributed_functions.out b/src/test/regress/expected/distributed_functions.out
index 173302670..4c2c08125 100644
--- a/src/test/regress/expected/distributed_functions.out
+++ b/src/test/regress/expected/distributed_functions.out
@@ -18,7 +18,7 @@ CREATE FUNCTION add(integer, integer) RETURNS integer
     LANGUAGE SQL
     IMMUTABLE
     RETURNS NULL ON NULL INPUT;
-SELECT create_distributed_function('add(int,int)');
+SELECT create_distributed_function('add(int,int)', '$1');
  create_distributed_function 
 -----------------------------
  
@@ -39,7 +39,7 @@ CREATE TYPE dup_result AS (f1 int, f2 text);
 CREATE FUNCTION dup(int) RETURNS dup_result
     AS $$ SELECT $1, CAST($1 AS text) || ' is text' $$
     LANGUAGE SQL;
-SELECT create_distributed_function('dup(int)');
+SELECT create_distributed_function('dup(int)', '$1');
  create_distributed_function 
 -----------------------------
  
@@ -52,6 +52,195 @@ SELECT * FROM run_command_on_workers('SELECT function_tests.dup(42);') ORDER BY
  localhost |    57638 | t       | (42,"42 is text")
 (2 rows)
 
+CREATE FUNCTION add_with_param_names(val1 integer, val2 integer) RETURNS integer
+    AS 'select $1 + $2;'
+    LANGUAGE SQL
+    IMMUTABLE
+    RETURNS NULL ON NULL INPUT;
+CREATE FUNCTION add_without_param_names(integer, integer) RETURNS integer
+    AS 'select $1 + $2;'
+    LANGUAGE SQL
+    IMMUTABLE
+    RETURNS NULL ON NULL INPUT;
+CREATE FUNCTION add_mixed_param_names(integer, val1 integer) RETURNS integer
+    AS 'select $1 + $2;'
+    LANGUAGE SQL
+    IMMUTABLE
+    RETURNS NULL ON NULL INPUT;
+-- postgres doesn't accept parameter names in the regprocedure input
+SELECT create_distributed_function('add_with_param_names(val1 int, int)', 'val1');
+ERROR:  syntax error at or near "int"
+LINE 1: SELECT create_distributed_function('add_with_param_names(val...
+                                           ^
+CONTEXT:  invalid type name "val1 int"
+-- invalid distribution_arg_name
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='test');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid 
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='int');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid 
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+-- invalid distribution_arg_index
+SELECT create_distributed_function('add_with_param_names(int, int)', '$0');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+SELECT create_distributed_function('add_with_param_names(int, int)', '$-1');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+SELECT create_distributed_function('add_with_param_names(int, int)', '$-10');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+SELECT create_distributed_function('add_with_param_names(int, int)', '$3');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1a');
+ERROR:  invalid input syntax for integer: "1a"
+-- non existing column name
+SELECT create_distributed_function('add_with_param_names(int, int)', 'aaa');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid 
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+-- NULL function
+SELECT create_distributed_function(NULL);
+ERROR:  the first parameter for create_distributed_function() should be a single a valid function or procedure name followed by a list of parameters in parantheses
+HINT:  skip the parameters with OUT argtype as they are not part of the signature in PostgreSQL
+-- NULL colocate_with
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1', NULL);
+ERROR:  colocate_with parameter should not be NULL
+HINT:  To use the default value, set colocate_with option to "default"
+-- empty string distribution_arg_index
+SELECT create_distributed_function('add_with_param_names(int, int)', '');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid 
+HINT:  Either provide a valid function argument name or a valid "$paramIndex" to create_distributed_function()
+-- valid distribution with distribution_arg_name
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='val1');
+ create_distributed_function 
+-----------------------------
+ 
+(1 row)
+
+-- valid distribution with distribution_arg_name -- case insensitive
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='VaL1');
+ create_distributed_function 
+-----------------------------
+ 
+(1 row)
+
+-- valid distribution with distribution_arg_index
+SELECT create_distributed_function('add_with_param_names(int, int)','$1');
+ create_distributed_function 
+-----------------------------
+ 
+(1 row)
+
+-- a function cannot be colocated with a table that is not "streaming" replicated 
+SET citus.shard_replication_factor TO 2;
+CREATE TABLE replicated_table_func_test (a int);
+SET citus.replication_model TO "statement";
+SELECT create_distributed_table('replicated_table_func_test', 'a');
+ create_distributed_table 
+--------------------------
+ 
+(1 row)
+
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1', colocate_with:='replicated_table_func_test');
+ERROR:  cannot colocate function "add_with_param_names" and table "replicated_table_func_test"
+DETAIL:  Citus currently only supports colocating function with distributed tables that are created using streaming replication model.
+HINT:  When distributing tables make sure that "citus.replication_model" is set to "streaming"
+-- a function cannot be colocated with a different distribution argument type
+SET citus.shard_replication_factor TO 1;
+CREATE TABLE replicated_table_func_test_2 (a bigint);
+SET citus.replication_model TO "streaming";
+SELECT create_distributed_table('replicated_table_func_test_2', 'a');
+ create_distributed_table 
+--------------------------
+ 
+(1 row)
+
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1', colocate_with:='replicated_table_func_test_2');
+ERROR:  cannot colocate function "replicated_table_func_test_2" and table "add_with_param_names" because distribution column types don't match
+-- colocate_with cannot be used without distribution key
+SELECT create_distributed_function('add_with_param_names(int, int)', colocate_with:='replicated_table_func_test_2');
+ERROR:  cannot distribute the function "add_with_param_names" since the distribution argument is not valid 
+HINT:  To provide "colocate_with" option, the distribution argument parameter should also be provided
+-- a function cannot be colocated with a local table
+CREATE TABLE replicated_table_func_test_3 (a bigint);
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1', colocate_with:='replicated_table_func_test_3');
+ERROR:  relation replicated_table_func_test_3 is not distributed
+-- a function cannot be colocated with a reference table
+SELECT create_reference_table('replicated_table_func_test_3');
+ create_reference_table 
+------------------------
+ 
+(1 row)
+
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1', colocate_with:='replicated_table_func_test_3');
+ERROR:  cannot colocate function "add_with_param_names" and table "replicated_table_func_test_3" because colocate_with option is only supported for hash distributed tables.
+-- finally, colocate the function with a distributed table
+SET citus.shard_replication_factor TO 1;
+CREATE TABLE replicated_table_func_test_4 (a int);
+SET citus.replication_model TO "streaming";
+SELECT create_distributed_table('replicated_table_func_test_4', 'a');
+ create_distributed_table 
+--------------------------
+ 
+(1 row)
+
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1', colocate_with:='replicated_table_func_test_4');
+ create_distributed_function 
+-----------------------------
+ 
+(1 row)
+
+-- show that the colocationIds are the same
+SELECT pg_dist_partition.colocationid = objects.colocationid as table_and_function_colocated
+FROM pg_dist_partition, citus.pg_dist_object as objects 
+WHERE pg_dist_partition.logicalrelid = 'replicated_table_func_test_4'::regclass AND 
+	  objects.objid = 'add_with_param_names(int, int)'::regprocedure;
+ table_and_function_colocated 
+------------------------------
+ t
+(1 row)
+
+-- now, re-distributed with the default colocation option, we should still see that the same colocation
+-- group preserved, because we're using the default shard creationg settings
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1');
+ create_distributed_function 
+-----------------------------
+ 
+(1 row)
+
+SELECT pg_dist_partition.colocationid = objects.colocationid as table_and_function_colocated
+FROM pg_dist_partition, citus.pg_dist_object as objects 
+WHERE pg_dist_partition.logicalrelid = 'replicated_table_func_test_4'::regclass AND 
+	  objects.objid = 'add_with_param_names(int, int)'::regprocedure;
+ table_and_function_colocated 
+------------------------------
+ t
+(1 row)
+
+-- if not paremeters are supplied, we'd see that function doesn't have
+-- distribution_argument_index and colocationid
+SELECT create_distributed_function('add_mixed_param_names(int, int)');
+ create_distributed_function 
+-----------------------------
+ 
+(1 row)
+
+SELECT distribution_argument_index is NULL, colocationid is NULL from citus.pg_dist_object
+WHERE objid = 'add_mixed_param_names(int, int)'::regprocedure;
+ ?column? | ?column? 
+----------+----------
+ t        | t
+(1 row)
+
+-- also show that we can use the function
+SELECT * FROM run_command_on_workers('SELECT function_tests.add_mixed_param_names(2,3);') ORDER BY 1,2;
+ nodename  | nodeport | success | result 
+-----------+----------+---------+--------
+ localhost |    57637 | t       | 5
+ localhost |    57638 | t       | 5
+(2 rows)
+
 -- clear objects
 SET client_min_messages TO error; -- suppress cascading objects dropping
 DROP SCHEMA function_tests CASCADE;
diff --git a/src/test/regress/expected/isolation_ensure_dependency_activate_node.out b/src/test/regress/expected/isolation_ensure_dependency_activate_node.out
index c79f53108..1180a3f69 100644
--- a/src/test/regress/expected/isolation_ensure_dependency_activate_node.out
+++ b/src/test/regress/expected/isolation_ensure_dependency_activate_node.out
@@ -1806,7 +1806,7 @@ step s2-public-schema:
 
 step s2-distribute-function: 
     CREATE OR REPLACE FUNCTION add (INT,INT) RETURNS INT AS $$ SELECT $1 + $2 $$ LANGUAGE SQL;
-	SELECT create_distributed_function('add(INT,INT)');
+    SELECT create_distributed_function('add(INT,INT)', '$1');
  <waiting ...>
 step s1-commit: 
     COMMIT;
@@ -1921,7 +1921,7 @@ step s2-public-schema:
 
 step s2-distribute-function: 
     CREATE OR REPLACE FUNCTION add (INT,INT) RETURNS INT AS $$ SELECT $1 + $2 $$ LANGUAGE SQL;
-	SELECT create_distributed_function('add(INT,INT)');
+    SELECT create_distributed_function('add(INT,INT)', '$1');
 
 create_distributed_function
 
@@ -2045,7 +2045,7 @@ step s2-create-schema:
 
 step s2-distribute-function: 
     CREATE OR REPLACE FUNCTION add (INT,INT) RETURNS INT AS $$ SELECT $1 + $2 $$ LANGUAGE SQL;
-	SELECT create_distributed_function('add(INT,INT)');
+    SELECT create_distributed_function('add(INT,INT)', '$1');
 
 create_distributed_function
 
diff --git a/src/test/regress/specs/isolation_ensure_dependency_activate_node.spec b/src/test/regress/specs/isolation_ensure_dependency_activate_node.spec
index f09df23e7..7c6d00eef 100644
--- a/src/test/regress/specs/isolation_ensure_dependency_activate_node.spec
+++ b/src/test/regress/specs/isolation_ensure_dependency_activate_node.spec
@@ -117,7 +117,7 @@ step "s2-create-table-with-type"
 step "s2-distribute-function"
 {
     CREATE OR REPLACE FUNCTION add (INT,INT) RETURNS INT AS $$ SELECT $1 + $2 $$ LANGUAGE SQL;
-	SELECT create_distributed_function('add(INT,INT)');
+    SELECT create_distributed_function('add(INT,INT)', '$1');
 }
 
 step "s2-begin"
diff --git a/src/test/regress/sql/distributed_functions.sql b/src/test/regress/sql/distributed_functions.sql
index c09132913..2dc6f7a42 100644
--- a/src/test/regress/sql/distributed_functions.sql
+++ b/src/test/regress/sql/distributed_functions.sql
@@ -15,7 +15,7 @@ CREATE FUNCTION add(integer, integer) RETURNS integer
     LANGUAGE SQL
     IMMUTABLE
     RETURNS NULL ON NULL INPUT;
-SELECT create_distributed_function('add(int,int)');
+SELECT create_distributed_function('add(int,int)', '$1');
 SELECT * FROM run_command_on_workers('SELECT function_tests.add(2,3);') ORDER BY 1,2;
 
 
@@ -30,12 +30,120 @@ CREATE FUNCTION dup(int) RETURNS dup_result
     AS $$ SELECT $1, CAST($1 AS text) || ' is text' $$
     LANGUAGE SQL;
 
-SELECT create_distributed_function('dup(int)');
+SELECT create_distributed_function('dup(int)', '$1');
 SELECT * FROM run_command_on_workers('SELECT function_tests.dup(42);') ORDER BY 1,2;
 
+CREATE FUNCTION add_with_param_names(val1 integer, val2 integer) RETURNS integer
+    AS 'select $1 + $2;'
+    LANGUAGE SQL
+    IMMUTABLE
+    RETURNS NULL ON NULL INPUT;
+
+CREATE FUNCTION add_without_param_names(integer, integer) RETURNS integer
+    AS 'select $1 + $2;'
+    LANGUAGE SQL
+    IMMUTABLE
+    RETURNS NULL ON NULL INPUT;
+
+CREATE FUNCTION add_mixed_param_names(integer, val1 integer) RETURNS integer
+    AS 'select $1 + $2;'
+    LANGUAGE SQL
+    IMMUTABLE
+    RETURNS NULL ON NULL INPUT;
+
+-- postgres doesn't accept parameter names in the regprocedure input
+SELECT create_distributed_function('add_with_param_names(val1 int, int)', 'val1');
+
+-- invalid distribution_arg_name
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='test');
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='int');
+
+-- invalid distribution_arg_index
+SELECT create_distributed_function('add_with_param_names(int, int)', '$0');
+SELECT create_distributed_function('add_with_param_names(int, int)', '$-1');
+SELECT create_distributed_function('add_with_param_names(int, int)', '$-10');
+SELECT create_distributed_function('add_with_param_names(int, int)', '$3');
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1a');
+
+-- non existing column name
+SELECT create_distributed_function('add_with_param_names(int, int)', 'aaa');
+
+-- NULL function
+SELECT create_distributed_function(NULL);
+
+-- NULL colocate_with
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1', NULL);
+
+-- empty string distribution_arg_index
+SELECT create_distributed_function('add_with_param_names(int, int)', '');
+
+-- valid distribution with distribution_arg_name
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='val1');
+
+-- valid distribution with distribution_arg_name -- case insensitive
+SELECT create_distributed_function('add_with_param_names(int, int)', distribution_arg_name:='VaL1');
+
+-- valid distribution with distribution_arg_index
+SELECT create_distributed_function('add_with_param_names(int, int)','$1');
+
+-- a function cannot be colocated with a table that is not "streaming" replicated 
+SET citus.shard_replication_factor TO 2;
+CREATE TABLE replicated_table_func_test (a int);
+SET citus.replication_model TO "statement";
+SELECT create_distributed_table('replicated_table_func_test', 'a');
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1', colocate_with:='replicated_table_func_test');
+
+-- a function cannot be colocated with a different distribution argument type
+SET citus.shard_replication_factor TO 1;
+CREATE TABLE replicated_table_func_test_2 (a bigint);
+SET citus.replication_model TO "streaming";
+SELECT create_distributed_table('replicated_table_func_test_2', 'a');
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1', colocate_with:='replicated_table_func_test_2');
+
+-- colocate_with cannot be used without distribution key
+SELECT create_distributed_function('add_with_param_names(int, int)', colocate_with:='replicated_table_func_test_2');
+
+-- a function cannot be colocated with a local table
+CREATE TABLE replicated_table_func_test_3 (a bigint);
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1', colocate_with:='replicated_table_func_test_3');
+
+-- a function cannot be colocated with a reference table
+SELECT create_reference_table('replicated_table_func_test_3');
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1', colocate_with:='replicated_table_func_test_3');
+
+-- finally, colocate the function with a distributed table
+SET citus.shard_replication_factor TO 1;
+CREATE TABLE replicated_table_func_test_4 (a int);
+SET citus.replication_model TO "streaming";
+SELECT create_distributed_table('replicated_table_func_test_4', 'a');
+SELECT create_distributed_function('add_with_param_names(int, int)', '$1', colocate_with:='replicated_table_func_test_4');
+
+-- show that the colocationIds are the same
+SELECT pg_dist_partition.colocationid = objects.colocationid as table_and_function_colocated
+FROM pg_dist_partition, citus.pg_dist_object as objects 
+WHERE pg_dist_partition.logicalrelid = 'replicated_table_func_test_4'::regclass AND 
+	  objects.objid = 'add_with_param_names(int, int)'::regprocedure;
+
+-- now, re-distributed with the default colocation option, we should still see that the same colocation
+-- group preserved, because we're using the default shard creationg settings
+SELECT create_distributed_function('add_with_param_names(int, int)', 'val1');
+SELECT pg_dist_partition.colocationid = objects.colocationid as table_and_function_colocated
+FROM pg_dist_partition, citus.pg_dist_object as objects 
+WHERE pg_dist_partition.logicalrelid = 'replicated_table_func_test_4'::regclass AND 
+	  objects.objid = 'add_with_param_names(int, int)'::regprocedure;
+
+-- if not paremeters are supplied, we'd see that function doesn't have
+-- distribution_argument_index and colocationid
+SELECT create_distributed_function('add_mixed_param_names(int, int)');
+SELECT distribution_argument_index is NULL, colocationid is NULL from citus.pg_dist_object
+WHERE objid = 'add_mixed_param_names(int, int)'::regprocedure;
+
+-- also show that we can use the function
+SELECT * FROM run_command_on_workers('SELECT function_tests.add_mixed_param_names(2,3);') ORDER BY 1,2;
+
 -- clear objects
 SET client_min_messages TO error; -- suppress cascading objects dropping
 DROP SCHEMA function_tests CASCADE;
 SELECT run_command_on_workers($$DROP SCHEMA function_tests CASCADE;$$);
 DROP USER functionuser;
-SELECT run_command_on_workers($$DROP USER functionuser;$$);
\ No newline at end of file
+SELECT run_command_on_workers($$DROP USER functionuser;$$);