Reflection gamma-ray and conversion electron Mossbauer spectroscopy (MS) completed by optical (OM), transmission electron (TEM) and atomic force microscopy (AFM) and microhardness measurements are applied in order to study the load and temperature driven changes in the phase composition and micro-structure of rail specimens at the surface and in the bulk. It is shown that severe plastic deformation due to the normal pressure as well as shearing together with a rapid change of temperature at service conditions lead to decomposition of the initial pearlite structure accompanied by surface oxidation, defect formation, carbon clustering, precipitation of nanosize carbide particles and austenitisation of the material. A severe plastic deformation is simulated using ball milling of specimens machined from a virgin rail and the results of phase analysis are compared. (C) 2004 Elsevier B.V. All rights reserved.