Rolling Contact Fatigue (RCF) damage on the surface of rails such a head check, squats is a growing problem. Since rail fractures can cause derailment with loss of life and property, the understanding of rail fracture mechanism is important for reducing damages on the rail surface. In this study, we have investigated RCF damage, fatigue growth and fracture surface morphology on the surface of broken rail using failure analysis and finite element (FE) analysis. The investigation indicates that the crack grows at about 20° to the depth of 8mm from the surface and branches into two cracks. One crack propagates downward at about 47°, the other propagates upward. Since the crack growth rate of the downward crack was faster than that of upward crack, rail eventually was broken. Since the downward branches lead to fracture of the rail, they are more dangerous to the integrity of rails. It has been observed that White Etching Layer (WEL) occurs within the surface of broken rail. It was found that the fatigue crack initiation and propagation was accelerated by WEL.