Yes, it's possible. When this happens, it's called a wet dream.

Here's a quote from Wikipedia

Sexual activity is a commonly reported theme of lucid dreams.[12] LaBerge, Greenleaf, and Kedzierski (1983) undertook a pilot study to determine the extent to which subjectively experienced sexual activity during REM lucid dreaming would be reflected in physiological responses:


Since women report more orgasms in dreams than men do, we began with a female subject. We recorded many different aspects of her physiology that would normally be affected by sexual arousal, including respiration, heart rate, vaginal muscle tone, and vaginal pulse amplitude. The experiment called for her to make specific eye movement signals at the following points: when she realized she was dreaming, when she began sexual activity (in the dream), and when she experienced orgasm. She reported a lucid dream in which she carried out the experimental task exactly as agreed upon. Our analysis revealed significant correspondences between the dream activities she reported and all but one of the physiological measures. During the fifteen-second section of her physiological record which she signaled as the moment of orgasm, her vaginal muscle activity, vaginal pulse amplitude, and respiration rate reached their highest values of the night, and they also were considerably elevated in comparison to the rest of the REM period. Contrary to expectation, heart rate increased only slightly.

— LaBerge, S., Greenleaf, W., & Kedzierski, B. (1983). Physiological responses to dreamed sexual activity during lucid REM sleep. Psychophysiology, 20, 454-455.