The safety of heavy-duty freight railway axles is threatened by defects, including inclusions, corrosion pits, fretting cracks and foreign object impact damages. Accordingly, surface strengthening techniques are applied to reduce the detrimental effect of defects on the structural integrity of railway axles. This work studied the effectiveness of heat treatment, in which the specimens machined from a heavy-duty freight railway axle were induction hardened under three types of processing parameters and tempered. The fatigue strengths of specimens with electrical discharge machined (EDM) notches and impact craters on their surfaces were tested. The fatigue behavior of induction-hardened (IH) specimens was compared with that of as-received (AR) specimens and fully-quenched (FH) specimens. The fatigue limit of smooth IH specimens is close to that of FH specimens while almost twice as much as that of AR specimens. Inclusions were found on the crack initiation sites on the surface or subsurface of AR and FH specimens. For IH specimens, the crack initiation sites moved to the zone between the case and the core. Fatigue strengths of IH and FH specimens decline with increasing EDM notch size but remain higher than AR specimens’. The influence of impact damage on fatigue properties depends on damage size and heat treatment process.