This study addresses the problem of dynamic strain localization in two steel alloys; HSLA-65 and DH-36 at elevated temperatures. It aims at understanding the adiabatic deformation of high strength structural steel by performing a nonlinear finite element (FE) analysis. A microstructural-based viscoplasticity model is integrated and implemented into the commercial FE code ABAQUS/Explicit via the user material subroutine coded as VUMAT. Numerical implementation for a simple compression problem meshed with one element is used for testing the efficiency of the proposed model implementation. The numerical results of the isothermal and adiabatic true stress-true strain curves compare very well with the experimental data for the two steel alloys over a wide range of temperatures and strain rates. The effectiveness of the present approach enables the study of strain localizations in a cylindrical hat-shaped specimen with certain dimensions, where the location of shear localization preceding shear band formation is forced to be between the hat and the brim. The FE simulations of the material instability problems converge to meaningful results upon further refinement of the FE mesh. Material length scales are implicitly introduced into the governing equations through material rate-dependency (viscosity). A sensitivity analysis is also performed on the physically-based viscoplasticity model parameters in order to study their effect on dynamic localizations. Several conclusions related to the width and intensity of the shear localization, considering various velocities and temperatures, are discussed.