Large eddy simulation is adopted to analyze the interaction between the tip vortices shed by two contra-rotating propellers, by using a computational grid consisting of 4.6 × 109 points. Despite the complexity of the wake topology, the results of the computations show an excellent agreement with the measurements from an earlier experimental study on the same system. The interaction between the tip vortices shed by the two propellers produces vortex rings. Each of them consists of six helical sides, which are connected by U-shaped vortex lobes. The three upstream lobes of each vortex ring move to outer radial coordinates, as a result of their shear with the downstream lobes of the upstream vortex ring. In contrast, the downstream U-shaped lobes move to inner radial coordinates, as a result of their shear with the upstream lobes of the downstream vortex ring. This interaction results in an overall expansion of the wake of the contra-rotating propellers. The regions of shear between the U-shaped lobes of consecutive vortex rings are the areas of the largest turbulent stresses, which achieve higher levels than those produced in the wake of the two front and rear propellers working alone. This complex flow physics also triggers a faster instability of the wake system, breaking its coherence at more upstream coordinates, in comparison with the isolated propellers.