Brahma took the form of a swan and went upwards and Vishnu took the form of a Varaha  and went into the earth. They couldn't find each other. When Brahma was coming up he came across a beautiful Ketki flower. She told Brahma that she was an offering on top of the fire column. Not being able to find the end, Bramha took the flower as witness and did not go any further. Lord Shiva was furious on this and also punished Bramha for telling a lie. He ordered that from that day onwards no one shall ever pray to him and the Ketaki flower will never be used as an offering ever. On this day, Lord Shiva manifested himself in the form of Linga and this day is celebrated as Mahashivratri.  

But what is the reason behind a Jaagran on Mahashivtari night? Legend and folk stories say that there was a man who had gone into a forest to collect wood and had lost his way out. Animals started scaring him in the darkness of the night and he climbed up a tree to seek protection until dawn. He was afraid that he would fall asleep and fall down from the branch so he decided to pluck a leaf and dropped it down after chanting "Shiva". He plucked thousands of leaves overnight and to his amusement there was a Shivling alongside the tree on which all leaves were falling. The tree was Bel (wood apple) tree. Lord Shiva was extremely plessed with this overnight prayers and dedication and rewarded him divine bliss. So all Shiv devotees chant "Shiva" throughout the night and then observe fast the other day and distribute prasad.