Horse, mare, outside in a tree (7)
I believe the answer is:
pimento
'a tree' is the definition.
(pimento tree is a kind of tree)
'horse mare outside in' is the wordplay.
'horse' becomes 'pinto' (pinto is a kind of horse).
'outside' means to remove the middle letters.
'in' is an insertion indicator.
'mare' with its middle removed is 'me'.
'pinto' placed around 'me' is 'PIMENTO'.
(Other definitions for pimento that I've seen before include "Allspice - top mine (anag)" , "Vegetable" , "Type of pepper" , "Jamaica pepper" , "Sweet red pepper" .)