Rail corrugation intensifies wheel-rail vibration, shortens service life of equipment, and compromises operational safety. It is therefore urgent to clarify its evolution mechanism for the formulation of prevention and control measures. To investigate the evolution mechanism and development law of rail corrugation on small-radius curves with a radius less than 350?m for modern trams, a train-track spatial coupling model was established using multi-body dynamics theory, with wheel-rail stick-slip vibration theory as the core. Combined with actual operating parameters obtained from field investigations, numerical models and wear calculation models based on friction work theory were adopted, and multiple iterative calculations were carried out using UM software. The adhesion coefficients and their overall dispersion rates under ideal conditions and actual in-service conditions were quantitatively analyzed, and the stick-slip vibration characteristics of the inner and outer rails under different working conditions, as well as their influences on the initiation and development of rail corrugation, were systematically compared. The results show that under the ideal smooth condition, both the lateral and longitudinal adhesion coefficients of the outer rail reach saturation, while the overall dispersion rate of the lateral adhesion coefficient is significantly higher than that of the longitudinal one, indicating that lateral stick-slip vibration is more intense and acts as the dominant factor driving the initiation of rail corrugation. For the inner rail, the longitudinal adhesion coefficient remains unsaturated, and the lateral adhesion coefficient tends to saturate with a lower overall dispersion rate than the outer rail, corresponding to overall weak stick-slip vibration. Under in-service conditions, with the superposition of track irregularities on the inner and outer rails, the nonlinear characteristics of the lateral and longitudinal adhesion curves remain stable and the overall dispersion rates of adhesion coefficients fluctuate slightly, demonstrating that track geometric irregularity does not change the dominant role of lateral stick-slip vibration on the outer rail. Comprehensive analysis of field investigations and simulation results reveals that the outer rail of modern trams on small-radius curves consistently exhibits pronounced lateral stick-slip vibration and early initiation of corrugation. This finding provides a theoretical basis for prioritizing outer rail monitoring and suppressing lateral stick-slip vibration in engineering practice.