Early detection of rail defects is necessary for preventing derailments and costly damage to the train and railway infrastructure. A rail surface flaw can quickly propagate from a small fracture to a broken rail after only a few train cars have passed over it. Rail defect detection is typically performed by using an instrumented car or a separate railway monitoring vehicle. Rail surface irregularities can be measured using accelerometers mounted to the bogie side frames or wheel axles. Typical signal processing algorithms for detecting defects within a vertical acceleration signal use a simple thresholding routine that considers only the amplitude of the signal. As a result, rail surface defects that produce low amplitude acceleration signatures may not be detected, and special track components that produce high amplitude acceleration signatures may be flagged as defects. The focus of this research is to develop an intelligent signal processing algorithm capable of detecting and classifying various rail surface irregularities, including defects and special track components. Three algorithms are proposed and validated using data collected from an instrumented freight car. For the first two algorithms, one uses a windowed Fourier Transform while the other uses the Wavelet Transform for feature extraction. Both of these algorithms use an artificial neural network for feature classification. The third algorithm uses the Wavelet Transform to perform a regularity analysis on the signal. The algorithms are validated with the collected data and shown to out-perform the threshold-based algorithm for the same data set. Proper training of the defect detection algorithm requires a large data set consisting of operating conditions and physical parameters. To generate this training data, a dynamic wheel-rail interaction model was developed that relates defect geometry to the side frame vertical acceleration signature. The model was generated by using combined systems dynamic modeling, and the system was solved with a developed combined lumped and distributed parameter system numerical approximation. The broken rail model was validated with real data collected from an instrumented freight car. The model was then used to train and validate the defect detection methodologies for various train and rail physical parameters and operating conditions. / Ph. D.