The determination of wear thresholds by the methods of wear vertical depth and wheel cycles was presented. The effect of wear thresholds on the prediction of rail profile, wear growth rate, fatigue damage, crack initiaiton position and life was analyzed. The results show that the error by the cubic interpolation spline with different wear thresholds to smooth rail profiles can be ignored. The wear thresholds have little effect on the average wear growth rate and an obvious impact on the fatigue damage. With small wear thresholds, such as the wear depth h≤0.04 mm or the wheel cycles t≤3.0×10⁴, the predicted crack initiation position and life is close to each other. The simulation efficiency is slightly lower. Compared with the results at smaller wear thresholds, the predicted crack initiation position at larger wear thresholds has a deviation of less than 5.0%. The crack initiation life has a maximum deviation of 13.5%. And the simulation efficiency is increased by 50%~60%.