Abstract: A rail cracked during the laying process. Transverse cracks appeared on the tread of the same batch of rail after using for a while. The failure reason of the rail was analyzed by facture surface observation, microstructure examination and energy spectrum analysis. The results indicate that scratch was found on the tread of rail. The friction led to high temperature of the rail metal and the white layer formation after fast cooling. The hard and brittle white layer is fragile, resulting in transverse crack on tread of rail. The crack propagated, leading to transverse fracture and early oval flaws.