A reliable and efficient rail track defect detection system is essential for maintaining rail track integrity and avoiding safety hazards and financial losses. Eddy current (EC) testing is a non-destructive technique that can be employed for this purpose. The trade-off between spatial resolution and lift-off should be carefully considered in practical applications to distinguish closely spaced cracks such as those caused by rolling contact fatigue (RCF). A multi-channel eddy current sensor array has been developed to detect defects on rails. Based on the sensor scanning data, defect reconstruction along the rails is achieved using an inverse algorithm that includes both direct and iterative approaches. In experimental evaluations, the EC system with the developed sensor is used to measure defects on a standard test piece of rail with a probe lift-off of 4–6 mm. The reconstruction results clearly reveal cracks at various depths and spacings on the test piece.