Asphalt concrete waterproofing layer (ACWL), which is used to reduce the moisture impact on high-speed railway structure, tends to crack at low temperatures and thus reduces its durability. Therefore, understanding the low-temperature cracking behavior of ACWL from both the material and structure perspectives is of great significance. In this study, thermal-mechanical coupled simulation based on extended finite element method (XFEM) was employed for research on this aspect, with the experimental and numerical monotonic-loading overlay test (ML-OT) to determine the fracture parameters of railway asphalt concrete materials and full-scale model to characterize the thermal cracking behaviors of ACWL. The results firstly showed that both the ML-OT and thermo-mechanical simulation on ACWL structure presented a four-stage fracture process, i.e. elastic response, crack initiation, crack propagation and final failure stage, at the temperature of −20 °C. Secondly, the effects of material formulation and structure design on the low-temperature cracking resistance was investigated: 1) In terms of material formulation, the binder B and gradation AC-13 was superior to their counterparts; 2) In terms of structure design, the ACWL layer thickness of 8 cm was the most unfavorable in the range of 6–16 cm, and the increased temperature difference accelerated the thermal cracking propagation in ACWL at the average temperature of −20 °C. In addition, two thermal stress mitigation strategies, namely laying the geotextile at base joints and setting expansion joints, were found to effectively prevent and delay the emergence of thermal cracks in ACWL at low temperatures. For recommendation, the developed thermal-mechanical coupled simulation framework, the custom-designed railway asphalt concretes, and the recommended ACWL thickness of 12 cm were applicable in future studies and engineering projects.