It is proposed that the local electro-explosion is the main cause of rail groove formation on rail surface in this paper. The primary current paths between rails and armature are around the armature edges or corners. The liquid metal film formed on armature-rail interface is produced by electric heating and friction heating related with mechanical and electromagnetic pressures. The liquid film is squeezed out along the armature edges and dragged into many filaments. The filaments through which the current flows can be named as current bridge. When the current bridges stretch to certain thinness and their temperature produced by the power loss reach to a certain value, the phase transition caused by electro-explosion phenomenon happens, so that the liquid metal transforms into plasma. The plasma bombs the rail surface, like the arc cutting conductor technology, and craters the surface, resulting from material melting, evaporation, and transferring. After multilaunch accumulation, the rail groove appears. The electro-explosion intensity and the size of craters are estimated in this paper. Although the estimation is approximate and rough, it might be achieved to demonstrate the essential relationship between the electro-explosion and the groove formation.