Hill's divided by rushing stream (7)
I believe the answer is:
torrent
'rushing stream' is the definition.
(I've seen this before)
'hill's divided by' is the wordplay.
'hill' becomes 'tor' (tor is a kind of hill).
'divided' becomes 'rent' ('rent' can be similar in meaning to 'divided').
'by' says to put letters next to each other.
'tor'+'rent'='TORRENT'
(Other definitions for torrent that I've seen before include "Heavy flow of water" , "Heavy rain" , "Great stream" , "Heavy stream" , "Turbulent stream of water" .)