Wear and crack initiation of steel rails is a problem of great significance to the railway industry. A high wear rate shortens the life of rails and the frequent rail replacement is expensive in terms not only of resources but also of track access time and delays affecting timetables. In addition, railhead profiles change gradually as the rails are worn and the greater the wear rate, the more often the rails need to be reground to maintain good train running performance. In contrast, a low wear rate means that cracks have time to develop in the plastically deformed rail steel and these may propagate deeper into the rails with potentially disastrous consequences. Finding the optimum combination of wear and grinding to maintain railhead profile and prevent cracks from growing is key to running a safe and cost-efficient railway. The large number of variables arising from track geometry, train dynamics, and wheel and rail profiles leads to wide variation in contact patch size and location. The two-dimensional model of ratcheting wear developed by Kapoor et al. has been developed to model the damage accumulation near the surface of the rail on the basis of a full three-dimensional contact stress distribution. Different rail steel microstructures can also be modelled and the effects of microstructure on wear and crack initiation are explored.