Notes rugged form in envy (8)
I believe the answer is:
begrudge
'envy' is the definition.
(I know that envy can be written as begrudge)
'notes rugged form in' is the wordplay.
'notes' becomes 'be' ().
'form' indicates an anagram (another form of the letters).
'in' means one lot of letters goes inside another.
'rugged' anagrammed gives 'egrudg'.
'be' placed around 'egrudg' is 'BEGRUDGE'.
(Other definitions for begrudge that I've seen before include "Envy (someone) the possession of" , "Envy another's possessions or good fortune" , "Feel resentment and envy" , "Envy, resent other's good fortune" , "Envy, be jealous of" .)