The work aims to study wear resistance and damage mechanism of corrosion resistant U68CuCr railway steel. M200 friction and wear tester was used to conduct rolling grinding experiment between U68CuCr/U75V railway steel and wheel steel. The pattern in which wheel rail wear varied from time was studied by measuring weight loss of wheel-rail with electronic analytical balance. Surface damage morphology of the wheel-rail was observed by using scanning electron microscope and super depth-of-field microscope. The abrasion loss of U68CuCr exceeded that of U75V during the first 15 h of wear, basically equal to the latter after 40 h, and lower than the latter as wear time prolonged. There were unpeeled flaky oxides as well as dents and scratches left after peeling, accompanied with plastic deformation on the steel rail surface worn in dry-state experiment. However, there was no flaky oxide on wheel surface. Rail subsurface was plastic deformation area during wear process. Hardness of plastic deformation area was higher than that of the substrate due to pearlite deformation and work hardening. U68CuCr exhibits good wear resistance and high corrosion resistance, which can improve the usability of steel rail. Surface damage of steel rail is mainly oxidation wear, accompanied with ridge oxide. Wear is the process in which oxidation and peeling alternate repeatedly.