Silicon carbide (SiC) is widely applied in high-power electronic devices due to its excellent properties. Stealth dicing (SD) as one of the dicing methods, exhibits the advantages of few thermal surface damage and low edge-chipping. In this study, we use an ultrafast laser to induce the modified layer structure inside the SiC wafers. The effects of laser processing parameters on the modified layers are studied. The formation mechanism of the modified layer and its influence on SD are analyzed. The result shows that the number of modified layer structures is mainly determined by the moving velocity. The different modified layer structures will affect the surface roughness of the SD cross-section and critical fracture load of the 4H–SiC wafers. Finally, we achieved the high-quality SD of SiC wafers, and a cross-section with the minimum surface roughness is approximately 381 nm.