Let's presume you're talking about a performance or other artistic creation, for example.
If you say 'It is inspired', you're talking about the inspiration which stimulated the artist to create this. It means that it is based on an original idea or is very imaginative and/or innovative.
If you say 'It is inspiring', you're talking about how it inspires YOU. Perhaps it makes you think about life in a different way or stirs you to go out and be creative yourself.