The European railway sector is undergoing dramatic changes. During the still ongoing liberalization process most vertically-integrated railway operators have already been “unbundled”. The shift from integrated to disintegrated companies coupled with the introduction of competition – so far in freight, but as of 2010 also in international passenger traffic – is having profound implications on the development and deployment of new technologies. In addition, within the framework of the Single European Market the main stakeholders have now to work under the constraint of interoperability. The paper examines railway standardization processes within an interoperable environment. So far, the railway sector has a strong history of national standards development. In the area of signalling, the result and current situation is therefore a patchwork of poorly interoperable systems. The paper builds on a case study of the development and deployment of a core signalling system – the European Rail Train Management System (ERTMS) – to illustrate the difficulties to coordinate a standardization process in such a liberalized and deregulated environment. The paper questions whether, in the framework of the emerging technological and institutional environment, the current governance of rail standards is suited to the EU’s objectives of a competitive railway market. Through the introduction of ERTMS the paper discusses the role of the new European Rail Agency (ERA) as the locus for coordinating the ERTMS standardization process. It makes recommendations as to which actor(s) is/are best suited to govern the standardization of such highly complex and interdependent technical systems.