Inca's home in upper Uruguay (4)
I believe the answer is:
peru
'inca's home' is the definition.
(I've seen this in another clue)
'in upper uruguay' is the wordplay.
'in' says the answer is hidden in the clue.
'PERU' is hidden in the letters of 'upper uruguay'.
(Other definitions for peru that I've seen before include "Mario Vargas Llosa's native land" , "Paddington Bear's country of birth" , "Country of Lima, Cuzco and Paddington Bear" , "South American country" , "Nazca, Cuzco here" .)