Large-eddy simulation is utilized to reproduce the instability of the tip vortices shed from the blades of an axial-flow turbine. The oscillations of their helical trajectories trigger mutual interaction between them. This accelerates the process of their destabilization, leading to leapfrogging and eventually to breakdown into smaller structures and loss of coherence, initiating wake contraction and momentum recovery from the outer radii towards the wake core. A strong correlation of the tip vortices instability with the behaviour of the Reynolds stresses and turbulence production is observed. In particular, the turbulent shear stress tied to the fluctuations of the radial and axial velocity components reveals the significant role of the interaction of each tip vortex with the outer region of the wake of the preceding blade, creating a ‘bridge’ between neighbouring tip vortices. Such an interaction enhances the process of mutual inductance between them, promoting production of turbulence and destabilization of the coherent structures. The latter results in increasing oscillations of the radial location of their cores and in a significant jump of the normal turbulent stress of radial velocity within them. Further downstream, the instability of the tip vortices triggers intense mixing phenomena between the outer free stream and the inner wake flow, leading the process of momentum recovery and wake contraction.