The University of California at San Diego (UCSD), under a Federal Railroad Administration (FRA) Office of Research and Development (R&D) grant, is developing a system for high-speed and non-contact rail defect detection. A prototype using an ultrasonic air-coupled guided wave signal generation and air-coupled signal detection, paired with a real-time statistical analysis algorithm, has been realized. This system requires a specialized filtering approach based on electrical impedance matching due to the inherently poor signal-to-noise ratio of air-coupled ultrasonic measurements in rail steel. Various aspects of the prototype have been designed with the aid of numerical analyses. In particular, simulations of ultrasonic guided wave propagation in rails have been performed using a Local Interaction Simulation Approach (LISA) algorithm. The system’s operating parameters were selected based on Receiver Operating Characteristic (ROC) curves, which provide a quantitative manner to evaluate different detection performances based on the trade-off between detection rate and false positive rate. The prototype based on this technology was tested in October 2014 at the Transportation Technology Center (TTC) in Pueblo, Colorado, and again in November 2015 after incorporating changes based on lessons learned.