Distinguished actor, one appearing in musical (7)
I believe the answer is:
olivier
'distinguished actor' is the definition.
(Sir Laurence Olivier)
'one appearing in musical' is the wordplay.
'one' becomes 'I' (Roman numeral).
'appearing in' is an insertion indicator.
'musical' becomes 'oliver' (musical based on Oliver Twist).
'i' put inside 'oliver' is 'OLIVIER'.
(Other definitions for olivier that I've seen before include "Classical actor" , "Acting baron (of Brighton), d. 1989" , "Great English actor playing rilievo" , "English actor, first artistic director of the National Theatre" , "English actor and director, died 1989" .)