A cutter bit includes a body formed integrally with a mounting shank. The body defines a pair of chip boxes with two planar surfaces and a cutting knife mounted to one of the planar surfaces of each chip box. The body defines holes from the chip boxes to the outer surface of the body, said holes communicating with grooves formed along the outer surface of the body such that a continuous air passage is formed circumferentially around the body by each hole and respective groove. The air passages cool the cutter bit as well as quickly remove material chips from the cutting edge and workpiece. The rapid removal of the chips also allows a better view of the cutting edge and the workpiece. The lack of material in the holes and grooves reduces cutter bit weight, allowing use with smaller motors and reducing the loads associated with cutting operations.