The effects of hard defects on rail steel surfaces on the wear damage and properties of the ER8C wheel material were studied. Results showed that abrasive and fatigue wear jointly determined the wear damage behavior of the wheel surface. High-hardness debris generated by hard defects during wear and post-spalling pits produced furrows and led to abrasive wear on the wheel surface. In the mild wear stage, the wear mechanisms were mainly abrasive, oxidative, and adhesive wear. In the severe wear stage, abrasive, oxidative, and fatigue wear were aggravated, which resulted in increased wear mass loss. Cracks were mainly initiated at the surface during different wear stages. In the mild wear stage, the length and angle of crack propagation were short. As the wear process intensified, the number of multilayer cracks in the surface material increased. One part of the crack bent toward the surface, while the other propagated deeper into the material at a larger angle, which considerably increased the crack propagation length and angle. This led to increased fatigue wear. With an increase in the slip ratio, the friction coefficient, fatigue and abrasive wear, and crack propagation degree increased. The wear damage further intensified, which aggravated the wear and substantially increased the wear mass loss.