Since the European Union has certain targets and criteria that must be fulfilled by its members, Turkey's situation in railway industry compared to the EU member countries (23 countries whose data were accessed) was examined through the approaches of Data Envelopment Analysis and Malmquist Index. The output-oriented Constant Return Scale (CRS or CCR) and the Variable Return Scale (VRS or BCC) were used in the efficiency analysis. The variables of railway per 1000 km(2)(RPKM), travelling frequency of people by railway (TFPR), staff per length of lines (SPLL), total operating expenditure (TOE) were considered as inputs and total operating revenue (TOR) was considered as output. In terms of operation performance, 16.6% of the selected countries were found to be efficient every year between 2004 and 2007 according both to the CRS and VRS models. Of the countries selected for the year of 2007, 79.16% were exhibit increasing returns to scale. The Malmquist index relating to productivity scores show that the average total factor productivity changes are 0.011%, 0.006% and 0.050 for 2005, 2006 and 2007, respectively. The conclusions of this study will help policymakers to determine Turkey's policy objectives for its integration to the EU in terms of railway indicators.