The story was first mentioned by Artemidorus of Daldis in his Oneirocritica (2nd century AD), but has become more widely known because of Freud who wrote about it.
The year was 332 BC. Alexander of Macedon was at the gates of the prosperous Phoenician port city of Tyre. He wanted to take control of the port and as a pretext he requested to offer a sacrifice to Heracles’s great temple inside the old city. Unsurprisingly his request was met with a refusal. He was angered, and decided to enter by force.
The Siege of Tyre had now been going on for some long, frustrating months. One night Alexander had a puzzling dream. He dreamt of a satyr, a creature of ancient mythology, resembling a man with a horse’s tail and ears, and an erect phallus. The satyr was dancing on Alexander’s shield. Alexander woke up puzzled and called Aristander, his seer, an accomplished and respected interpreter of dreams. On hearing the story, Aristander was able to decipher it easily. He divided the word satyr (“σάτυρος”) in two: “σα” (which means “yours”) and “Τύρος” (“Tyre”). The message from the gods is clear, Aristander announced. Alexander would only have to persist with the siege, and Tyre would be his. Alexander was very happy with this message from the gods. He doubled his efforts and, eventually, he managed to conquer Tyre.