It's improving -- fine grin is spreading (8)
I believe the answer is:
refining
'it's improving' is the definition.
(refining is a kind of improving)
'fine grin is spreading' is the wordplay.
'is spreading' is an anagram indicator.
'fine'+'grin'='finegrin'
'finegrin' with letters rearranged gives 'REFINING'.
(Other definitions for refining that I've seen before include "Improving by pruning or polishing" , "Infringe in removing impurities" , "Making pure" , "Purifying; clarifying" .)