Magic Powder

Magic Powder is an item obtained in A Link to the Past and Link's Awakening. In both cases is is created for Link by a witch in return for bringing her a mushroom.

In A Link to the Past, the Mushroom is found in the Lost Woods and handed over to the Witch just northeast of Hyrule Castle. Once Link has given her the mushroom, the magic shop assistant will give him the powder.

Magic Powder has a number of uses; it can dissolve bushes, turn Buzz Blobs into Cukeman, and turn antifairies into normal fairies. It can also be used on various enemies, turning them into a Slime.

Perhaps its most useful application is to awaken a sleeping bat in a well near the Dwarven Swordsmiths' shop. When sprinkled on the strange altar inside of the well, it will summon the strange bat, who rants at you for a while before doubling your magic power.

In Link's Awakening, Link must give the Sleepy Toadstool to the Witch before she can mix it, and it can also be won at the Trendy Game. It has a variety of uses; lighting fires, destroying enemies, and even waking up Tarin from a strange nap.

Trivia
In A Link to the Past, try sprinkling some Magic Powder onto the cucco inside one of the houses in Kakariko Village to see it become a human and scold you for teasing the other cuccos.