When something is funny in the sense of humorous and you can laugh about it, the usual adjective in German is lustig, which is nearly always translated as “funny.”
Ja, das ist ganz lustig.
Yes, that is pretty funny.
Caption 27, Wissenschaft - Neues Element: das CoperniciumPlay Caption
The English “making fun” of something or somebody, meaning to mock them, has a direct parallel in German that also uses the word lustig, as in sich lustig machen:
Sie lachten über seine großen Füße und machten sich über seinen plumpen, grauen Körper lustig.
They laughed about his big feet and made fun of his plump, gray body.
Captions 36-37, Märchen - Sagenhaft - Das hässliche EntleinPlay Caption
Beware, however, as there is a partial false friend to be found in the German adjective (and adverb) komisch. This is occasionally used for the similar English word “comic” or “comical,” as in the Komische Oper (or “Comic Opera”) in Berlin, but usually it is meant in a more derogatory sense:
Die entstehen immer komischer.
They form more and more oddly.
Caption 57, Wissenschaft - Neues Element: das CoperniciumPlay Caption
Es war schon ein bisschen komisch.
It was indeed a little bit weird.Play Caption
Of course, sometimes even English “funny” is also meant somewhat derogatorily rather than in a humorous sense:
Aber das ist eine ein komisches Beispiel.
But that is a funny example.
Caption 23, Deutschkurs in Tübingen - Konjunktionen - Part 2Play Caption
Go to Yabla German and find more examples of the adjectives lustig and komisch in a real world context to get a better feel for which is the appropriate word.