•Welding residual stress distributions in rail head and web are different;•Residual stress affects the rail subsurface crack propagation path, life and rate;•The shear stress in different directions made the crack propagation paths different. To accurately evaluate the influence of welding residual stress on the fatigue crack propagation behavior of rail, the distribution of residual stress of welded rail was predicted, the subsurface fatigue crack propagation type, path, rate and lifetime of the rail and the welded rail with residual stress were calculated and compared. The results showed that the subsurface crack propagated with II + III mixed-mode and the slip propagation of mode II was dominant for both the cases of residual stress existing and not, while the crack propagation path, rate and lifetime were quite different for the two cases. For horizontal circular cracks, when there was no welding residual stress, the crack propagation path was mainly transverse under wheel-rail contact load, the propagation rate was relatively small, and the propagation lifetime was longer. When there was welding residual stress, the crack propagated longitudinally, the crack propagation rate increased significantly, and the fatigue lifetime was shorter.