Following scant evidence for the effects of proximity to rail transit on car use, we pinpoint the impacts of rail transit and neighbourhood characteristics on both transit and car use in the Minneapolis-St. Paul metropolitan area. We apply the structural equations modelling approach on 597 residents who moved into the Hiawatha Light Rail Transit (LRT) corridor after it opened. The analysis is based on a self-administrated survey where all attributes of the built environment and transit quality are perceived measures. Using a quasi-longitudinal design to compare the behaviour of movers into the Hiawatha and control corridors, we found that the Hiawatha LRT acts as both a catalyst and a magnet. Movers into the Hiawatha corridor experience transit improvement, which increases transit use and reduces car use. The LRT also enables transit-liking people who were unable to realise their preference previously to relocate near the LRT. However, the LRT has no significant effects on changes in car ownership.