A wafer processing method for dividing a wafer (including a substrate and a functional layer formed on the front side of the substrate) along a plurality of division lines. The functional layer is partitioned by the division lines to define a plurality of regions. The method includes the following steps: attaching a protective member to the front side of the wafer; cutting the back side of the substrate of the wafer in an area corresponding to each division line with a cutting blade, thereby forming a division groove having a depth not reaching the functional layer so that a part of the substrate is left in this area; applying a laser beam to the wafer from the back side of the substrate along the bottom of each division groove extending along each division line to thereby cut the part of the substrate and the functional layer along each division line.