Once, Dionysus found his old schoolmaster and foster father, Silenus, missing. The old man had been drinking wine, and had wandered away drunk, and was found by some peasants, who carried him to their king, Midas (alternatively, he passed out in Midas' rose garden). Midas recognized him, and treated him hospitably, entertaining him for ten days and nights with politeness, while Silenus entertained Midas and his friends with stories and songs. On the eleventh day he brought Silenus back to Dionysus. Dionysus offered Midas his choice of whatever reward he wanted. Midas asked that whatever he might touch should be changed into gold. Midas rejoiced in his new power, which he hastened to put to the test. He touched an oak twig and a stone and both turned to gold. Overjoyed, as soon as he got home, he ordered the servants to set a feast on the table. "So Midas, king of Lydia, swelled at first with pride when he found he could transform everything he touched to gold: but when he beheld his food grow rigid and his drink harden into golden ice then he understood that this gift was a bane and in his loathing for gold cursed his prayer" (Claudian, In Rufinem). In a version told by Nathaniel Hawthorne, he found that when he touched his daughter, she turned into a statue as well.
Now he hated the gift he had coveted. He prayed to Dionysus, begging to be delivered from starvation. Dionysus heard and consented; he told Midas to wash in the river Pactolus. He did so, and when he touched the waters, the power passed into the river, and the river sands became changed into gold [Alernatively, Midas jumped into the water and immediately, the water turned into gold, killing Midas]. This explained why the river Pactolus was so rich in gold and the wealth of the dynasty claiming Midas as forefather, no doubt the impetus for this etiological myth. (Graves). Gold was perhaps not the only metallic source of Midas' riches: "King Midas, a Phrygian, son of Cybele, first discovered black and white lead."
Midas, now hating wealth and splendor, moved to the country, and became a worshipper of Pan, the god of the fields. Roman mythographers asserted that his tutor in music was Orpheus. Once Pan had the audacity to compare his music with that of Apollo, and to challenge Apollo, the god of the lyre, to a trial of skill. Tmolus, the mountain-god, was chosen as umpire. Pan blew on his pipes, and with his rustic melody gave great satisfaction to himself and his faithful follower, Midas, who happened to be present. Then Apollo struck the strings of his lyre. Tmolus at once awarded the victory to Apollo, and all but Midas agreed with the judgment. He dissented, and questioned the justice of the award. Apollo would not suffer such a depraved pair of ears any longer, and caused them to become the ears of a donkey.
Midas was mortified at this mishap. He attempted to hide his misfortune with an ample turban or headdress. But his hairdresser of course knew the secret. He was told not to mention it. He could not keep the secret; so he went out into the meadow, dug a hole in the ground, whispered the story into it, and covered the hole up. A thick bed of reeds sprang up in the meadow, and began whispering the story and saying "King Midas has a donkey's ears." Some of his people heard and began to gossip about it. Midas found out who had told, and was going to kill him, but decided not to. Apollo then came and gave him normal ears again, as he had completely shown that he had changed his ways. Also, as a gift, Apollo gave Midas his daughter back. In glee, Midas grabbed his daughter, and she returned to her golden state. Angrily Midas dug his hands into the earth, and in some versions of mythology it is said that even Atlas himself was turned to gold. Midas then prayed to Cupid, begging him to get revenge on Apollo. Cupid came to him, and told him to touch and turn one of his arrows into gold. Upon doing so, Cupid went to Apollo and shot him with the Golden Arrow. Apollo didn't turn to gold, however. It is said that Apollo himself was given headaches for all of eternity with the overwhelming sense of love and greed (gold).
Sarah Morris demonstrated (Morris 2004) that donkeys' ears were a Bronze Age royal attribute, born by King Tarkasnawa (Greek Tarkondemos) of Mira, on a seal inscribed in both Hittite cuneiform and Luwian hieroglyphs: in this connection the myth would appear to justify for Greeks the exotic attribute.