The prediction of wheel-rail rolling contact fatigue (RCF) crack initiation is a critical task in rail operation, particularly when material surface defects are present at the wheel-rail interface. A FE (finite element) model for wheel-rail rollers with indents, representing defects, was developed, and a novel crack initiation prediction procedure was proposed. In addition, a full-scale wheel-rail simulation model for a rail with an indent was established for investigating the effects of indent size. The results indicated that the maximum contact pressure on the rail material first occurred at the leading edge of the indent and then moved to the trailing edge with an increased value. The crack initiation criterion was determined by comparing the experimental and calculated results. The RCF crack initiated first at the trailing edge of the indent and later at the leading edge. In addition, the crack initiation life decreased with an increase in the indentation depth. To obtain the same contact pressure as that calculated for the small indent in the disc-on-disc case, the indent size needed to be doubled for the full-scale wheel-rail case. The predicted crack initiation life in the full-scale wheel-rail model was similar to that in the wheel-rail roller model.