This study aims to evaluate the effect of vanadium microalloying on rolling contact fatigue (RCF) and wear behavior of railway wheel steels. It involves microstructural analysis and mechanical testing, including hardness, tensile, and rolling/sliding tests on the test steels, followed by electron backscatter diffraction, residual stress, and microhardness analyses after rolling/sliding tests. The findings demonstrate that vanadium microalloying leads to the alleviation of dynamic recrystallization, strain hardening, and compressive residual stress within the outermost layer beneath the worn surface, indicating a reduction in the plastic deformation capacity during dry rolling/sliding conditions. RCF resistance of railway steel can be enhanced through vanadium microalloying, as it simultaneously delays crack initiation by increasing yield strength and restricts crack growth by reducing plastic deformation capacity. While vanadium microalloying enhances the matrix hardness of wheel steel, it concurrently diminishes its strain hardening ability, potentially compromising its wear resistance. In addition, this study found that the yield ratio, being indicative of plastic deformation capacity and strain hardening ability, can serve as a suitable parameter for characterizing the RCF and wear resistances of tested steels. It exhibits a positive correlation with RCF resistance and a negative correlation with wear resistance.