Abstract The continuing increase of axle loads, train frequencies and train speeds both in passenger service and freight operations are causing a consequent increase in stress on track and trains. Infrastructure owners have to face the challenge to manage and reduce the costs caused by the effects of these increasing stresses – Rolling Contact Fatigue (RCF) and wear. According to shakedown theory several approaches can be selected to mitigate the formation of damage on the rail surface. The rail grade influences the formation of damage by its microstructure and mechanical properties. Managing the friction between wheel and rail with a friction modifier will reduce the maximum possible traction that can be transmitted from wheel to rail. A friction modifier provides constant and positive friction characteristics (no maximum in the traction - creepage relationship) at an intermediate friction level without influencing traction or braking behavior of trains. Abstract This thesis investigates the wear and RCF behavior of several pearlitic and bainitic rail steels on a full scale test rig at voestalpine Schienen GmbH under dry and friction modifier contact conditions and compares the results with selected track tests of voestalpine. The test rig is capable of producing realistic contact conditions that allow the formation of wear and RCF defects in very short time periods within 100,000 wheel passes. On the test rig the improved wear and RCF resistance of higher hardness steels is clearly seen. Bainitic steels show a slightly different behavior – the wear resistance is reduced compared to a pearlitic steel with the same hardness level though the RCF resistance is higher. The tests with the friction modifier highlight its capability to further reduce the formation of wear and RCF and thereby provide an addition to rail life extension. Although the trends are consistent on the rig and in track, the absolute values concerning wear and RCF differ due to some specific differences between track and test rig conditions. Finally ideas are postulated that explain on one hand the test rig specific wear behavior of the rail grades and on the other the formation of periodic, rail grade dependent crack spacing of the defect type head checks.