Lord Shiva’s body is always covered with ash and Shiv devotees wear ash tilak on forehead and hands. There is an interesting story in the Shiva Purana which narrates how Lord Shiva came to be associated with Ash. There once lived a sage whose lineage was traced to the famous Saint Bhrigu. This sage performed intense austerities and became very powerful. He used to consume only fruits and later only green leaves and thus got the name – Parnada. 

Sage Parnada continued his intense tapas and controlled all the animals and plants in the forest he lived. Once while cutting some grass to repair his hermitage, the sage cut his middle finger. But to his surprise instead of blood he saw sap of tree oozing through the cut. 

Now Parnada thought that he had become so pious that instead of blood, sap is oozing through his body. Pride filled his mind and he started shouting in joy that he is the most pious man in the world now.

Lord Shiva who witnessed this event took the guise of an old man and reached the spot. When the old man asked for the reason for his uncontrollable delight, Parnada said that he has become the most pious man in the world as his blood as become quite similar to the sap of fruits and trees.

Then the old man asked what is there to be elated in this. It is just a sap. But when trees and plants are burned they turn into ash. Only ash remains that is surely the higher stage.

To demonstrate it the old man sliced his finger and suddenly ash came out of it. Sage Parnada soon realized that it was Shiva standing before him and prayed to him for forgiveness for his ignorance. 

It is said that ever since then Shiva wears ash to remind his devotees about the ultimate reality and foolishness of getting enamored in physical beauty.