A self-setting marker buoy comprising a floatation unit (20), including a hollow upper member (22), a separable end cap closure lower member (36) with a line storage spool (38) having a uniquely shaped line-trapping element (52) on its lower flange (50), anchor line (44), and anchor (68). The upper member (22) can be tapered inwardly toward the top to allow multiple upper members (22) to nest together for storage. Lower members (36) can also stack together. The line-trapping element (52) is in the shape of a disk having alternating slots (54) and spokes (56) at the perimeter thereof. When tossed onto the water, the weight of the anchor (68) causes the floatation unit (20) to tilt sufficiently to allow the release of anchor line (44) as the anchor (68) descends to the bottom of the water body. When the anchor (68) reaches the bottom, ballast (62) in the lower member (36) rights the floatation unit (20), and the line-trapping element (52) comes into effect to prevent any further release of anchor line (44).