Fatigue cracks in rails can be the source of failures and subsequent derailments. The present paper examines the effect of residual stresses on the fatigue and fracture resistance of rail steel materials and the probable influence of residual stresses on the fatigue performance of rails in service. The magnitudes of residual stresses in rails were measured as a part of this study. Tensile and compressive residual (mean) stresses are shown to have a significant effect on the fatigue resistance of rail steels through tests using cylindrical smooth and compact tension specimens (free of inherent residuals) over a range of mean stress conditions. Fatigue and fatigue crack growth rate data developed are analyzed using specific damage parameters to consolidate the effect of mean stress. These data are then used in combination with measured residual stresses on rails to estimate the influence of service/fabrication induced, residual stresses in actual rail.