erregend
arousing
Something that causes sexual desire or excitement.
Viele empfinden die Szenen in dem Film als erregend.
Many people find the scenes in the film arousing.

arousing / exciting
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arousing
Something that causes sexual desire or excitement.
Viele empfinden die Szenen in dem Film als erregend.
Many people find the scenes in the film arousing.

'Erregend' is the present participle of the verb 'erregen' (to excite/arouse). It describes something that actively causes 'Erregung' (excitement, arousal, stimulation) in someone or something. This form is often used to describe the property of a thing that has an effect on others.
Die Rede des Politikers hatte eine erregende Wirkung auf das Publikum.
The politician's speech had an exciting effect on the audience.
The sexual meaning is very prominent in everyday language and can overshadow the other meanings in unclear contexts. Whether general excitement or a medical impulse is meant is usually made clear by signal words such as 'Debatte' (debate, excitement) or 'Reiz' (stimulus, medicine).
Die Entdeckung war wissenschaftlich sehr erregend.
The discovery was very exciting scientifically.
A very common and important combination is 'Aufsehen erregend' (sensational, attracting attention). This expression means that something creates great public interest or a sensation and is often used like a single adjective.
Der Künstler präsentierte ein Aufsehen erregendes Werk in der Galerie.
The artist presented a sensational work in the gallery.
The meaning in the medical or biological sense is purely technical language. It is used to describe the triggering effect of a stimulus on nerves, muscles, or cells. You will hardly ever hear this usage in everyday language.
Der erregende Impuls wird über die Nervenbahnen weitergeleitet.
The excitatory impulse is transmitted through the nerve pathways.
awesome / horny
'geil' and 'erregend' can both express strong positive feelings or a sexual effect. The most important difference is style. 'geil' is very colloquial and, depending on the situation, can mean 'awesome' or be meant sexually. Because of this, it can quickly sound too direct or inappropriate. 'erregend' is more neutral and describes more precisely that something causes excitement, suspense, or sexual desire. Learners may confuse the words because both have to do with a strong effect in some situations. In everyday language among friends, people are more likely to say 'geil' for 'awesome'; in more precise or serious descriptions, 'erregend' fits better.

Der Film war spannend und in einigen Szenen sehr erregend.
The film was suspenseful and very arousing in some scenes.
Das Konzert gestern war echt geil.
The concert yesterday was really awesome.