A large-eddy simulation (LES) solver which combines an immersed-boundary technique with a curvilinear structured grid has been developed to study the temporal and spatial dynamics of a rotor tip-clearance flow, with the objective of determining the underlying mechanisms for low pressure fluctuations downstream of the rotor near the endwall. Salient feature of the numerical methodology, including the mesh topology, the treatment of numerical instability for non-dissipative schemes in a highly skewed mesh, and the parallelization of the code for shared memory platforms are discussed. Qualitative agreements have been observed between present LES and experimental measurements. The simulations indicate that the interaction between the moving endwall boundary layer and blade boundary layers and tip-leakage flow creates a highly complicated flow which is dominated by distinct vortical structures including the tip-leakage and tip-separation vortices. These vortical structures are found to convect downstream, expand in size and generate intense turbulent fluctuations in the endwall region.