Emerging AI accelerators increasingly adopt wafer-scale manufacturing technologies, integrating hundreds of thousands of AI cores in a mesh-based 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 fully exploit these accelerators. We introduce WaferLLM, the first wafer-scale LLM inference system. WaferLLM is guided by a novel PLMR device model 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 200$\times$ better wafer-scale accelerator utilization than state-of-the-art systems. On a commodity wafer-scale accelerator, WaferLLM delivers 606$\times$ faster and 22$\times$ more energy-efficient GEMV compared to an advanced GPU. For LLMs, WaferLLM enables 39$\times$ faster decoding with 1.7$\times$ better energy efficiency. We anticipate these numbers will grow significantly as wafer-scale AI models, software, and hardware continue to mature.