The soap actor was called to the Diary Room and dished out a telling off by show producers in tonight's show.
Following on from the face to face nominations, Ken was involved in a chat with 80s singer Alexander O'Neal.
Ken referred to the R&B hitmaker as a "negro" and while Alexander didn't seem to care too much, he did advise: "Just say black, say black. We don't do the negro thing. It's just black, okay."
Ken reacted: "It's just the Spanish word for Black."
"But you're not Spanish," Alexander pointed out.
Big Brother called Ken to the Diary Room about the remarks.
"You used language that was wholly unacceptable and offensive," Big Brother said as he gave Ken an official warning.
They added: "If you use this language again, Big Brother may have no choice but to remove you from the house."
Ken was also warned about his 'sexist' comments aimed towards some of the female housemates.
The remarks had earlier sparked a huge row between Ken and Perez that caused BB to step in and split the pair up.
Perez had snapped: "You're a f**king pig, a f**king pig. You've shown yourself to be a misogynistic , disgusting, homophobic pig."
In the Diary Room, Big Brother added to Ken: "Big Brother has warned you in the strongest possible terms and expects your behaviour to change."
Celebrity Big Brother 2015 continues nightly on Channel 5.
Browse pictures of tonight's show here...