Why is my neutered cat kneading with an erect penis and arched back?

Male cats will tend to do this behavior if they have not been neutered. If your cat has been neutered I would check with the vet who performed the surgery to ensure that both testicles were retrieved at the time of the surgery and that your cat does not have a retained testicle or is what we call a cryptorchid. Some cats fail to descend a testicle and it remains in the abdominal cavity. One of the signs that this has happened is latent "sexual activity such as "masturbation activity" such as your cat is doing. Not all cats who do this have retained testicles, but it can often be the case. If you and your vet know for 100% certainty that he had both testicles removed, then this may just be a behavior that your cat does. Your vet may have some suggestions to dissuade your cat from doing this, but it is generally nothing harmful and the cat is just acting out, will finish and there is nothing else to it. If the cat did retain a testicle, the vet can go in surgically to remove it. It is important to remove the retained testicles because they can become cancerous. I myself have a cat who does this (he had both his jewels removed successfully) so we just call it making "dirty biscuits". There really is no reason for his behavior, he just does it... But I made sure that there was no medical reason first! :) Usually I have a nice water bottle on hand and that seems to work great :)