The American author Samuel Langhorne Clemens (1835-1910) used the pen name “Mark Twain” for the first time in the Territorial Enterprise (Virginia City, NV) on February 3, 1863. He later explained that the name “Mark Twain” had been used by Captain Isaiah Sellers, and that Clemons took “Mark Twain” after Sellers’ death. However, Sellers died in 1864 (after Clemons had already used the name) and it is not known that Sellers had ever called himself “Mark Twain.”
 
“Mark twain” is a nautical term, defined by the Oxford English Dictionary as “the two fathom mark on a sounding-line.” “By the mark twain” was cited in print in 1847. “On Wednesday, sounding some three miles below this place, his ‘mark twain’” was cited in print in 1857. “However, as the water is at least mark twain the old wrecks won’t make any more wrecks at present” was cited in print in 1861. It is probable that the term “mark twain” was quite common with American riverboat pilots in the mid-19th century.
 
Vanity Fair (a New York City-based publication that contained many humor pieces, and a publication that Clemons was likely to have read) published on January 26, 1861:
 
“Mr. MARK TWAIN proposed to insert the words “Northern half,” so as to make the resolution apply to the Northern half only of the needle.”
 
Kevin Mac Donnell, an Austin (TX) book dealer and scholar, found this citation in Google Books, and the discovery was featured in the news articles “A new theory could solve the mystery of ‘Mark Twain’” (in August 2013) and “How Samuel Clemens Actually Became Mark Twain: He Stole a Bad Joke” (in October 2013). This writer (Barry Popik) had read every page of Vanity Fair back in the early 1990s at the New York Public Library, and I had found the same citation twenty years earlier. The importance of the 1861 citation, however, does not appear to be very great, since “mark twain” had been an existing nautical term at that time.
 
 
Wikipedia: Mark Twain
Samuel Langhorne Clemens(November 30, 1835 – April 21, 1910), better known by his pen name Mark Twain, was an American author and humorist. He wrote The Adventures of Tom Sawyer (1876) and its sequel, Adventures of Huckleberry Finn (1885), the latter often called “the Great American Novel.”
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Twain’s journey ended in the silver-mining town of Virginia City, Nevada, where he became a miner on the Comstock Lode. Twain failed as a miner and worked at a Virginia City newspaper, the Territorial Enterprise. Working under writer and friend Dan DeQuille, her ehe first used his pen name. On February 3, 1863, he signed a humorous travel account “Letter From Carson – re: Joe Goodman; party at Gov. Johnson’s; music” with “Mark Twain.”
 
(Oxford English Dictionary)
twain, adj. and n.
U.S. Naut. Two fathoms. Esp. in phr. mark twainthe two fathom mark on a sounding-line. Cf. mark n.1 12b. Obs.
Hence the pseudonym adopted on 3 Feb. 1863 by the U.S. author Samuel Langhorne Clemens.
1799   J. W. Russell in R. D. Paine Romance Old Time Shipmaster (1907) iii. 43   The man in the chains suddenly sung out ‘quarter less twain’, and we instantly struck.
1863   ‘M. Twain’ in A. B. Paine Mark Twain (1912) I. xl. 221,  I want to sign my articles..‘Mark Twain’. It is an old river term, a leads-man’s call, signifying two fathoms—twelve feet.
1947   E. M. Mack Mark Twain in Nevada xv. 228   How many times when he was on the River had he heard the leadsman..call out, ‘By the mark, twain!’
 
15 September 1847, Newport (RI) Daily News, pg. 1, col. 4:
But for me there’s no handing or reefing again,
For Death’s leadsman I hear, crying “by the mark twain.”
(...)but we do not think there will be a flood,
OLD BILL.
 
Chronicling America
3 September 1857, White Cloud Kansas Chief (White Cloud, KS), pg. 2, col. 5:
The man who does the sounding board on the steamer Admiral, is blessed with a good pair of lungs. On Wednesday, sounding some three miles below this place, his “mark twain,” “quarter less twain,” “six feet,” etc., were distinctly heard in town.
 
30 December 1857, New Albany (IN) Daily Ledger, “River and Steamboat News,” pg. 3, col. 2:
Our reports from above say there is plenty of rain and “lots of water coming,” but we do not think there will be a flood, but there will be an abundance of water for all navigable purposes, and mark twain may be looked for on the falls by the last of the week.
 
5 February 1858, New Albany (IN) Daily Ledger, “River and Steamboat News,” pg. 3, col. 2:
This is what may be called a big river—not less than mark twain in the channel to the mouth.
 
21 August 1860, New Albany (IN) Daily Ledger, “River and Steamboat News,” pg. 3, col. 3:
We annexed statement of the depth of water on several bars below Cairo:—Paw Paw mark twain; Greenville eight feet; Helena eight feet scant; President’s Island quarter less twain; ...
 
Chronicling America
7 April 1860, Memphis (TN) Daily Appeal, pg. 4, col. 3:
Below this point the latest arrivals report nine feet water going in above Dismal Swamp, and mark twain at the foot of President’s Island.
 
8 January 1861, New Albany (IN) Daily Ledger, ‘River and Steamboat News,” pg. 3, col. 2:
However, as the water is at least mark twain the old wrecks won’t make any more wrecks at present.
 
Google Books
26 January 1861, Vanity Fair, “The North Star,” pg. 41, col. 1:
Mr. MARK TWAIN proposed to insert the words “Northern half,” so as to make the resolution apply to the Northern half only of the needle.
 
Chronicling America
13 February 1862, Plymouth (IN) Weekly Democrat, “The Pigeon Roost” by J. F. L., pg. 1, col. 2:
“By the mark, Twain!” sung out Joe, holding u the tickler, which was half empty, to the light.
 
26 April 1862, Charleston (SC) Daily Courier, “The Old Quartermaster’s Adieu,” pg. 4, col. 1:
But for me there’s no “handing” or “reefing” again,
I have cast my last lead, and ‘tis “by the mark, twain.”
   
Google Books
Life on the Mississippi
By Mark Twain
London: Chatto & Windus
1883
Pg. 448:
He (Captain Isaiah Sellers—ed.) never printed another paragraph while he lived, and he never again signed “Mark Twain” to anything. At the time that the telegraph brought the news of his death, I was on the Pacific coast. I was a fresh new journalist, and needed a nom de guerre; so I confiscated the ancient mariner’s discarded one, and have done my best to make it remain what it was in his hands—a sign and symbol and warrant that whatever is found in its company may be gambled on as being the petrified truth; how I have succeeded, it would not be modest in me to say.
 
Google Books
The Singular Mark Twain:
A Biography
By Fred Kaplan
New York, NY: Doubleday
2003
Pg. 107:
Beginning in 1877, he explained many times that he was indebted for the name to Isaiah Sellers. (...)  In fact, Sellers died in 1864. And scholars examined his river reports without finding any signature but the captain’s name. It is unlikely that the stories will ever be reconciled.
 
Kansas City (MO) Star
BOOKS
A new theory could solve the mystery of ‘Mark Twain’
August 18, 2013
BY MARTIN ZEHR
Special to The Star
When Samuel Langhorne Clemens, a Missouri-born ex-steamboat pilot, signed “Mark Twain” to a letter published in the Feb. 3, 1863 edition of the Virginia City (Nev.) Territorial Enterprise, he made an intentional commitment to a career as a writer, lecturer and celebrity that would bring him regional, national and international fame.
 
Adoption of the nom de plume, an important landmark in Twain lore, has, nonetheless, raised unresolved questions regarding its origin. There is, of course, general acceptance of the notion that the phrase, “mark twain” refers to a depth of two fathoms, about 12 feet, a riverboat pilot’s demarcation of the minimal level required for safety.
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This situation changed earlier this month, at the International Conference on Mark Twain Studies, held in Elmira, N.Y., where Kevin Mac Donnell, a well-known Twain scholar, presented the results of an academic sleuthing expedition that would make Sherlock Holmes proud.
 
Mac Donnell made use of the Google Print Library Project, a search tool not available to earlier scholars. He was searching through 19th-century humor magazines when he came across a character in a burlesque sketch by the name of Mark Twain. It was in the Jan. 26, 1861 issue of Vanity Fair, a short-lived but widely read humor magazine of the era Twain is known to have read.
   
The Atlantic Wire
How Samuel Clemens Actually Became Mark Twain: He Stole a Bad Joke
ZACH SCHONFELD OCT 4, 2013
It only took us a century and a half, but we may have finally learned the real source of Samuel Clemens’ ubiquitously recognizable nom de plume: he stole it from a humor journal so lame that he quickly invented a cooler story to pass off as true. But he wouldn’t have gotten away with such a trick today.
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Scholars have never been clear on the source of Twain’s pseudonym, but stories emerged during his lifetime. One famously suggested “Mark twain!” was the writer’s trademark cry in a Virginia City saloon he frequented, meaning “Mark two more drinks.” Twain himself claimed an altogether different source for his pseudonym: he said the name had been used by Isaiah Sellers, a riverboat captain who died in 1863, and “as he could no longer need that signature, I laid violent hands upon it without asking permission of the proprietor’s remains.”
 
But that’s been in question for quite a while, particularly after researchers scanned Sellers’ river reports and found no appearance of the Twain name. Plus, Twain himself cheekily cast doubt on his own version of events late in his life. Mac Donnell’s find, by contrast, adds up pretty well:
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COMMENTS
gspowers51 • 14 hours ago
Ok, but Clemens became a licensed riverboat pilot at age 24. Perhaps if he saw the words “mark twain” in the periodical, it might have brought to memory a phrase he already knew. But it is all conjecture.