The localized artificial diffusivity method is investigated in the context of large-eddy simulation of compressible turbulent flows. The performance of different artificial bulk viscosity models are evaluated through detailed results from the evolution of decaying compressible isotropic turbulence with eddy shocklets and supersonic turbulent boundary layer. Effects of subgrid-scale (SGS) models and implicit time-integration scheme/time-step size are also investigated within the framework of the numerical scheme used. The use of a shock sensor along with artificial bulk viscosity significantly improves the scheme for simulating turbulent flows involving shocks while retaining the shock-capturing capability. The proposed combination of Ducros-type sensor with a negative dilatation sensor removes unnecessary bulk viscosity within expansion and weakly compressible turbulence regions without shocks and allows it to localize near the shocks. It also eliminates the need for a wall-damping function for the bulk viscosity while simulating wall-bounded turbulent flows. For the numerical schemes used, better results are obtained without adding an explicit SGS model than with SGS model at moderate Reynolds number. Inclusion of a SGS model in addition to the low-pass filtering and artificial bulk viscosity results in additional damping of the resolved turbulence. However, investigations at higher Reynolds numbers suggest the need for an explicit SGS model. The flow statistics obtained using the second-order implicit time-integration scheme with three sub-iterations closely agrees with the explicit scheme if the maximum Courant–Friedrichs–Lewy is kept near unity.