We develop a coupled hydro-morphodynamic numerical model for carrying out large-eddy simulation of stratified, turbulent flow over a mobile sand bed. The method is based on the curvilinear immersed boundary approach of Khosronejad et al. (Adv. Water Resour., vol. 34, 2011, pp. 829-843). We apply this method to simulate sand wave initiation, growth and evolution in a mobile bed laboratory open channel, which was studied experimentally by Venditti & Church (J. Geophys. Res., vol. 110, 2005, F01009). We show that all the major characteristics of the computed sand waves, from the early cross-hatch and chevron patterns to fully grown three-dimensional bedforms, are in good agreement with the experimental data both qualitatively and quantitatively. Our simulations capture the measured temporal evolution of sand wave amplitude, wavelength and celerity with good accuracy and also yield three-dimensional topologies that are strikingly similar to what was observed in the laboratory. We show that near-bed sweeps are responsible for initiating the instability of the initially flat sand bed. Stratification effects, which arise due to increased concentration of suspended sediment in the flow, also become important at later stages of the bed evolution and need to be taken into account for accurate simulations. As bedforms grow in amplitude and wavelength, they give rise to energetic coherent structures in the form of horseshoe vortices, which transport low-momentum near-bed fluid and suspended sediment away from the bed, giving rise to characteristic 'boil' events at the water surface. Flow separation off the bedform crestlines is shown to trap sediment in the lee side of the crestlines, which, coupled with sediment erosion from the accelerating flow over the stoss side, provides the mechanism for continuous bedform migration and crestline rearrangement. The statistical and spectral properties of the computed sand waves are calculated and shown to be similar to what has been observed in nature and previous numerical simulations. Furthermore, and in agreement with recent experimental findings (Singh et al., Water Resour. Res., vol. 46, 2010, pp. 1-10), the spectra of the resolved velocity fluctuations above the bed exhibit a distinct spectral gap whose width increases with distance from the bed. The spectral gap delineates the spectrum of turbulence from the low-frequency range associated with very slowly evolving, albeit energetic, coherent structures induced by the migrating sand waves. Overall the numerical simulations reproduce the laboratory observations with good accuracy and elucidate the physical phenomena governing the interaction between the turbulent flow and the developing mobile bed.