PURPOSE: To cut a substrate sheet superposed on a back sheet without cutting the back sheet and then form an embroidery along the cut part.

CONSTITUTION: This sewing machine with a laser cutter is provided by stopping the lifting, lowering and driving of a needle bar 31, continuously oscillating a laser beam at a specific output from a laser oscillator 21 in the stopped state of the needle bar while continuously moving a sheet holding frame 75 in the X-Y directions, continuously moving the sheet holding frame 75 on a sewing machine table in the X-Y directions so as to provide a specific shape, accurately cutting a substrate sheet 51 held by the sheet holding frame 75 into the specific shape with the laser beam oscillated from the laser oscillator 21 during the movement thereof, then lifting, lowering and driving the needle bar 31 and intermittently moving the sheet holding frame 75 synchronously with the lifting, lowering and driving thereof and thereby forming an embroidery along the cut part of the sheet substrate 51.