Cyclic grinding maintenance of rails removes surface degradations and damages and restores the original rail profile, which deteriorated during wheel-rail contacts. Thus, cyclic grinding increases the service life of a rail and prevents catastrophic rail failure. Besides the advantages of cyclic grinding, concerns have risen that grinding itself might set favourable conditions for crack initiation during subsequent wheel-rail contacts. In this research, White Etching Layers (WEL) and Brown Etching Layers (BEL) at the running surface and sub-surface of a pearlitic Maximum Head Hardness (MHH) steel grade rail were found to have formed due to heating during grinding. A comprehensive understanding of the formation of these layers during cyclic grinding, their evolution during subsequent wheel-rail contacts and their respective microstructures has been established in this work. Additionally, the initiation and growth of cracks found at the running surface of the rail has been studied in relation to these layers, cyclic grinding and wheel-rail contacts. WEL formed during grinding consists out of martensite, retained austenite and partially dissolved cementite. The formation of this layer increases the hardness at the rail surface from approximately 400 HV to 1000 HV. BEL is occasionally found as a stratified layer underneath the WEL. BEL consists out of martensite, retained austenite and pearlite containing partially dissolved cementite. The hardness of this layer was approximately 800 HV. Formation of the WEL and the BEL occurs due to frictional heating of the material at the rail surface above the A1 temperature during grinding. Grinding additionally increases the roughness of the rail surface and induces residual tensile stresses in the rail material. Heating above the A1 temperature during wheel-rail contacts after grinding is unlikely due to the insufficient amounts of wheel creepage expected at the rail specimen. Additional effects of wheel-rail contacts after grinding are observed. Firstly, the high surface roughness and residual tensile stresses induced by grinding are reduced. Secondly, complete spallation of the WEL induced by grinding occurs at the most severely wheel loaded section of the running surface. Thirdly, large plastic deformation of the material at the rail surface causes the initiation and growth of cracks due to ratcheting. Finally, the initial stages of mechanically induced WEL formation are observed at the most severely wheel loaded section of the running surface. The cementite of the original pearlite dissolves via thinning and fragmentation. It is expected that further wheel loading of this material will lead to a layer of nanostructured ferrite with carbon mainly facilitated at defects sites in the lattice. Cracks initiated at the rail surface initially grow at a constant angle with the running surface, in the direction of the largest stress induced by wheel-rail contact. At a later stage, cracks bend towards the running surface and branch due to a changing stress field at increasing distance from the wheel-rail contact point. Oxide inside the crack indicate that water was present in these cracks during their growth. This water reduces the friction between the crack flanks, increasing the crack growth rate and the probability of branching.