Brittle White Etching Layers on rail initiate surface cracking and further progress to cause squats. The nature of WELs and their formation mechanism are not fully understood. In current study, ex-service damaged rails containing both WELs and squats, obtained from distinct rail track regions associated with different traffic contact conditions, were investigated in details. The particular interested sites of WELs, including topmost, middle and transition regions, were characterised by advanced material characterisation technologies, such as high resolution Synchrotron diffraction, Focus Ion Beam milling, transmission electron microscopy and selected area electron diffraction. In heavy braking rail regions, WEL containing martensite and retained austenite was observed, alongside undeformed pearlite at the interface between the WEL and the parent rail matrix. It was concluded that this type of WEL, referred as TP-WEL, is induced by temperature and pressure changes. In contrast, in low braking utilisation regions where the traffic speed is steady, WEL caused by rolling contact fatigue deformation contained nanocrystalline martensite and a region of severe plastic deformation immediately below the WEL. This type of WEL is termed as SD-WEL. Microstructural observations suggest that both WELs types play significant roles in crack initiation and squat formation.