The problem of rolling contact fatigue cracks that occur on wheel and rail surfaces is one of the most significant in the railway industry. This paper introduces a finite element method (FEM) model that has been developed for the analysis of such cracks. The model consists of FEM analysis that takes into account the local material response generated by the contact load between wheel and rail. Both the wheel and the rail are modeled using an FEM mesh, and the wheel is loaded and rotated in the rolling direction on the rail. Combined isotropic and kinematic hardening law was used to model the decaying hardening rate that is important in rolling contact situations. Stress and strain values obtained through FEM analysis were combined with the multi-axial fatigue life model and the critical plane approach to predict the onset of fatigue cracks in the railhead. The calculated results were compared to the data obtained from investigation in the field, and discussions were made.