Abstract: The frictional contact problem between rail and wheel is analyzed by contact element method and initial stress method. The micro-roughness on contact surface, the liquid existing on rail surface and elastic-plastic property of material are considered. The distribution of contact pressures and stresses on contact surface is obtained for dry contact and contact with liquid. There exist a series of peak values of contact pressure that are much larger than the value of Hertzian contact pressure. This is because that only the protuberant part is in contact status but the concave part is not in contact status when the micro-roughness of contact surface is considered. The peak value of contact pressure is larger for elastic analysis than that for elastic-plastic anlaysis. In the case of elastic-plastic analysis, the peak value of contact pressure for dry contact surface is larger than that for contact surface with liquid. This is because the liquid on the contact surface is considered as incompressible, and the liquid would transfer force when it is restricted in a concave part of contact surface.