Railway transport plays a vital role in a country’s economic growth. Derailments result in loss of life, damage to rolling stock, service disruptions and harm the environment leading to the decrease in economic growth of a country. Improving train operating safety has been a high priority of the rail industry and the government. Train accidents occur as a result of many different causes; however, some are much more prevalent than others. One of the important causes for derailment is Rolling contact fatigue (RCF), which has gained more importance after the 1990’s due to the several derailment accidents caused by it. Rolling contact fatigue is a group of rail damages that manifest themselves on the surface or near surface regions of the rail. RCF arises due to the rolling/sliding contact stresses that occur between rail and wheel leading to severe plastic deformation of the rail head with RCF cracks resulting in high maintenance costs. Another consequence of plastic deformation is the formation of white etching layer (WEL), a martensitic layer created from the deformed pearlite while the rail is in service. Effect of WEL is to reduce the resistance of rail steel to crack initiation because of its brittle nature. In recent years, WEL has generated considerable research interests on its behavior under RCF conditions. Though most of the research carried out on WEL focuses either on the thermal or mechanical effects on its formation, little research has been carried out on the combined thermo-mechanical effects on WEL formation. In the present work, an attempt has been made to study the formation of WEL by thermo-mechanical simulation using the GLEEBLE thermo-mechanical simulator. Cylindrical samples prepared from the unaffected portion of the Dutch rail steel R260Mn were subjected to simultaneous deformation of maximum effective compressive strain of 3% and heating to maximum temperatures ranging from 650°C to 930°C. The simulation was carried out by varying the maximum temperature and no. of cycles. The metallurgical characterization of simulated WEL was performed using optical microscopy and scanning electron microscopy. The micro-hardness of WEL was studied using Vickers micro-hardness tester. The chemical composition of Mn was studied using electron probe microanalysis to ascertain the effect of Mn on band like formation occurred in samples processed at a certain temperature. It is observed that the simultaneous heating and deformation increases the amount of WEL formed when compared to simulation by only heating. Hardness is found to increase with increase in temperature. When the no. of cycles increases the amount of WEL formation also increases. Simulation at very high temperature results in homogenous formation of WEL with negligible amount of untransformed pearlite.