Efficient inspection methods are necessary for detection of rail corrugation to improve the safety and ride quality of railway operations. This paper presents a novel fiber optic technology for detection of rail corrugation based on fiber laser accelerometers (FLAs), tailored to the measurement of surface damage on rail structures. The principle of detection of rail corrugation using double integration of axle-box acceleration is presented. Then we present the theoretical model and test results of FLAs which are installed on the bogie to detect the vertical axle-box acceleration of the train. Characteristics of high sensitivity and large dynamic range are achieved when using fiber optic interferometric demodulation. A flexible inertial algorithm based on double integration and the wavelet denoising method is proposed to accurately estimate the rail corrugation. A field test is carried out on the Datong–Qinhuangdao Railway in north China. The test results are compared with the results of a rail inspection car, which shows that the fiber laser sensing system has a good performance in monitoring rail corrugation.