No one knows the exact origins of buck naked, which means completely naked, but the American Heritage Dictionary says it’s from the U.S. South. The earliest example we can find in historical Google News searches (which of course are very limited) is from 1915, and the term gradually becomes more common as the century progresses.
Despite what some sources say, butt naked is not wrong. It’s just a newer form. Even that is disputed, though, as some have conjectured that the buck in buck naked was originally an alteration of butt. Still, the earliest instances of butt naked we can find are from the 80s.
Plus, both buck naked and butt naked are slang terms, and you’re not likely to see either used in earnest in any type of formal text. When it comes to slang terms, colloquialisms, and idioms, questions of right and wrong are irrelevant because these things by definition don’t conform to any so-called standard English. So if you’re going to use buck naked or butt naked, it’s safe to use the one you like better.
On the web, butt naked is more common than buck naked by a ratio of about three to one. In searches covering edited content, though, buck naked is far more common, which suggests that many writers and editors consider it the more acceptable form.
At those prices I would be sitting buck naked at a desk, writing a column with a goose quill pen. [Beaver Valley Times (1950)
He said he was running around his house butt-naked, looking for his cassette player. [Newsday (1990)]
He practically steals the picture via his buck-naked, high-speed motorcycle ride. [AV Club]
The father has walked around butt naked when he knew my wife was in the kitchen. [Waterloo Record]
The idealised figure, in the Roman style – half god, half emperor, buck naked – is so heavy that the floor had to be reinforced to support it. [Sydney Morning Herald]
“He was a bit surprised that there were two people in his room and he was butt naked,” Mr Watt said. [quote in The Age (Melbourne, Australia)]
Language Log offers a more thorough take
“Buck Naked” at the Mavens’ Word of the Day