The present work is an investigation on how an initially introduced residual stress-state affects the service life of a rail, i.e. the time to fatigue crack initiation. The finite element (FE) method was used to make two-dimensional thermo-mechanical analyses of the rail cooling and roller straightening processes. The results became the initial conditions in a three-dimensional elastic-plastic rail model; the model is part of an FE tool developed for rolling contact fatigue (RCF) analysis of rails. The results from this tool were analysed for fatigue, for eight wheel passages, according to a method which incorporates a critical plane approach that evaluates fatigue damage on a cycle-by-cycle basis. A heavy-haul (30 tonne) train traffic situation on the Iron-ore Line in Sweden was studied with respect to subsurface fatigue crack initiation in straight track. Three examples using the rail model in the FE tool were assessed: (a) an initially stress-free rail, (b) a measured residual stress field in a newly manufactured rail, and (c) a calculated residual stress field from the cooling and roller straightening analyses. The results from the thermo-mechanical FE analyses of the rail manufacturing process showed tensile residual stresses in the longitudinal direction of the rail; this was validated with experimental measurements on newly manufactured rails. The FE tool and fatigue calculations revealed only small differences in results for the three examples. It was concluded that, because of the very high axle load in the present traffic situation, the local wheel-rail contact loads governed the fatigue life to crack initiation. Additional FE tool calculations were made to show the axle load at which rail manufacturing stresses reduce the fatigue life to crack initiation.