Rolling his arm only because strike bowler Avishkar Salvi hurt himself in the second over of the day, Kambli struck with the very second ball with his seam up stuff from a short run-up to send back Shreyas Khanolkar.
The India batsman then dismissed the other overnight batsman Tejinder Pal Singh in his third over to effectively break the back of hosts' batting.
Kambli ended up with figures of 8.5-4-15-2.
Resuming at 111 for three, Railways had fallen to 129 for five and they never really recovered from those two telling blows.
Though the lower order showed some resilience, they were eventually bowled out for 284.
Ajit Agarkar (5-96) and Sairaj Bahutule (2-58) chipped away at the Railways tail to give the defending champions a 77-run first innings lead.
At stumps, the visitors were three for no loss with Vinayak Mane on three and first innings centurion Wasim Jaffer yet to open his account.
Railways, champions in 2001-02, stumbled in their own backyard. It is not often that a visiting team has got the better of Railways at the Karnail Singh Stadium.