Nicomachean Ethics II.3

We must take as a sign of states of character the pleasure or pain that ensues on acts; for the man who abstains from bodily pleasures and delights in this very fact is temperate, while the man who is annoyed at it is self-indulgent, and he who stands his ground against things that are terrible and delights in this or at least is not pained is brave, while the man who is pained is a coward.

This is where we start to begin to discuss degrees of virtue. Doing the right thing for the right reason isn't proof of being fully virtuous; the fully virtuous person will also experience pleasure from doing the right thing. If it pains him to do the right thing, even though he does it anyway he is only partly virtuous. Thus a man can be said to be a coward even if he stands his ground against terrible things. 

Many people object to that; we have an aphorism often attributed to John Wayne that "courage is being scared to death, but saddling up anyway." Aristotle's point is that once you are fully accustomed to bravery, it feels normal and natural and therefore pleasant to be brave. You have to go through the habituation period in which it will be terrifying, but eventually it will not be so: it will become your habit, and therefore it will be at least comfortable to do it because keeping our habits is comfortable. There is even a pleasure in it.

For moral excellence is concerned with pleasures and pains; it is on account of the pleasure that we do bad things, and on account of the pain that we abstain from noble ones. Hence we ought to have been brought up in a particular way from our very youth, as Plato says, so as both to delight in and to be pained by the things that we ought; for this is the right education.

Emphasis added. Plato says a lot of things about this; it is a major subject of the Laws (see sidebar for commentary). 

Again, if the virtues are concerned with actions and passions, and every passion and every action is accompanied by pleasure and pain, for this reason also virtue will be concerned with pleasures and pains. This is indicated also by the fact that punishment is inflicted by these means; for it is a kind of cure, and it is the nature of cures to be effected by contraries.

The medical science there is a bit dubious, but this was very close to the beginning of medical science;  Hippocrates was a contemporary of Plato's and an old man in Aristotle's youth.

It's obvious that you can apply pain as a punishment, so that fear of a whipping (say) will keep you from public drunkenness: however pleasant the drinking is, the contrary pain might hold you back. However, we are meant to apply contraries in 'matters of pleasure and pain,' so there must be sometimes we would 'punish' with pleasure. It sounds strange to say it that way, but in fact we do this. Aristotle says we abstain from noble deeds because of the pains associated with doing them; awards and honors are often publicly bestowed to encourage the doing of great things.

Again, as we said but lately, every state of soul has a nature relative to and concerned with the kind of things by which it tends to be made worse or better; but it is by reason of pleasures and pains that men become bad, by pursuing and avoiding these- either the pleasures and pains they ought not or when they ought not or as they ought not, or by going wrong in one of the other similar ways that may be distinguished. Hence men even define the virtues as certain states of impassivity and rest; not well, however, because they speak absolutely, and do not say 'as one ought' and 'as one ought not' and 'when one ought or ought not', and the other things that may be added. We assume, then, that this kind of excellence tends to do what is best with regard to pleasures and pains, and vice does the contrary.

The following facts also may show us that virtue and vice are concerned with these same things. There being three objects of choice and three of avoidance, the noble, the advantageous, the pleasant, and their contraries, the base, the injurious, the painful, about all of these the good man tends to go right and the bad man to go wrong, and especially about pleasure; for this is common to the animals, and also it accompanies all objects of choice; for even the noble and the advantageous appear pleasant.

This seems straightforward, though it runs into Aristotle's earlier discussion about the best kind of life being one that isn't common with animals, but one particular to human nature. We have in common with animals that we can be motivated by pleasures and pains; we are distinct in that we can use reason to challenge that base instinct when it is appropriate. An animal can be trained using pleasure and pain, but a man can train himself to ignore them.  

Again, it has grown up with us all from our infancy; this is why it is difficult to rub off this passion, engrained as it is in our life. And we measure even our actions, some of us more and others less, by the rule of pleasure and pain. For this reason, then, our whole inquiry must be about these; for to feel delight and pain rightly or wrongly has no small effect on our actions.

Compare and contrast with the utilitarian school of ethics, which also holds that the whole of ethics is about pleasure and pain -- maximizing pleasure for as many as possible, and minimizing pain. That is definitely not what Aristotle is talking about here. He wants you to cultivate a character that will forgo pleasures in order to maintain health and strength; that will dare and endure pains in order to accomplish noble things. Seeking 'utility' is not any part of this ethic. 

Again, it is harder to fight with pleasure than with anger, to use Heraclitus' phrase', but both art and virtue are always concerned with what is harder; for even the good is better when it is harder. Therefore for this reason also the whole concern both of virtue and of political science is with pleasures and pains; for the man who uses these well will be good, he who uses them badly bad.

That virtue, then, is concerned with pleasures and pains, and that by the acts from which it arises it is both increased and, if they are done differently, destroyed, and that the acts from which it arose are those in which it actualizes itself- let this be taken as said.

That last sentence could do with some analysis. Virtue is concerned with pleasures and pains, yes. The acts that produce virtue increase the virtue if they are done correctly, as the brave man practices courage by going to Airborne school and thereby becomes braver. If the same act is done badly, the virtue can be destroyed by it instead of increased by it. 

To switch to moderation/temperance instead of courage, imagine that you are at a buffet in Las Vegas. Every kind of food is there, as much as you want of any of it. If you face this temptation properly, you will eat a good meal that is fairly healthy and proportionate in size. Then you will become more temperate by practicing temperance. Eating at the buffet can increase your virtue.

However, if you indulge in all the various sweets and fatty foods, you will become less temperate by the same act of eating at the buffet. If you get in the habit of stuffing yourself at Vegas buffets, you may destroy the virtue of temperance in yourself entirely. The same act that causes the virtue to become actualized in yourself can, done badly instead of well, destroy it.