Emerging AI accelerators increasingly adopt wafer-scale manufacturing technologies, integrating hundreds of thousands of AI cores in a mesh architecture with large distributed on-chip memory (tens of GB in total) and ultra-high on-chip memory bandwidth (tens of PB/s). However, current LLM inference systems, optimized for shared memory architectures like GPUs, fail to exploit these accelerators fully. We introduce WaferLLM, the first wafer-scale LLM inference system. WaferLLM is guided by a novel PLMR model (pronounced as "Plummer") that captures the unique hardware characteristics of wafer-scale architectures. Leveraging this model, WaferLLM pioneers wafer-scale LLM parallelism, optimizing the utilization of hundreds of thousands of on-chip cores. It also introduces MeshGEMM and MeshGEMV, the first GEMM and GEMV implementations designed to scale effectively on wafer-scale accelerators. Evaluations show that WaferLLM achieves up to 200$\times$ higher accelerator utilization than state-of-the-art methods. Leveraging a wafer-scale accelerator (Cerebras WSE2), WaferLLM delivers GEMV operations 606$\times$ faster and 16$\times$ more energy-efficient than on an NVIDIA A100 GPU. For full LLM inference, WaferLLM achieves 10-20$\times$ speedups over A100 GPU clusters running SGLang and vLLM. These advantages are expected to grow as wafer-scale AI models, software, and hardware continue to mature. WaferLLM is open-sourced at https://github.com/MeshInfra/WaferLLM.