AALRT is the first modern light rail transit for Ethiopia; it was warmly welcomed by the publicrnand after 1 Â½ year still it doesnâ€™t answer publics need of transport. However during this shortrnperiod the trains suffer with fast wheel wear problem and ERC loses money for maintenancerncosts when changing and re-profiling wheels.rnThis study aims to reduce wheel rail wear by optimizing wheel profile and check dynamicrnperformance analysis of used and new optimized wheel profile.rnThe methodology of this paper starts using two basics 1. If the shape of the Rolling RadiusrnDifference function is defined by the wheel and rail profiles, then the opposite is also valid 2)rnWhen the same type of rolling stock is running on the same track and no influence of otherrntype railway vehicles then there is a possibility to design or optimize a new wheel profile,rnwhich matches an existing rail profile. Then the obtained profile checked regarding to dynamicrnperformances (tested for stability, wear and safety requirements) using SIMPACK computerrnpackage.rnAfter optimization and performance analysis the result of this paper shows optimized wheelrnprofile has wear index of 1900N, 420N and 56N on R50curve, R150 curve and on straight trackrnrespectively. Which is optimized by 1100N, 120N and 22N wear index compared to currentlyrnused AALRT wheel profile.rnAs Conclusion compared to AALRT wheel profile the optimized profile has less wear rate,rnbetter dynamic performance, and the same safety requirements. Therefore wheel profilernoptimization has great impact on wheel Rail wear and AALRT have to work on it for betterrnresult.