Overlooking North American lake is a nest (5)
I believe the answer is:
aerie
'nest' is the definition.
(aerie is a kind of nest)
'overlooking north american lake is a' is the wordplay.
'overlooking' is a charade indicator (letters next to each other) (in a down clue, some letters go above others).
'north american lake' becomes 'erie' (I've seen this before).
'erie' after 'a' is 'AERIE'.
(Other definitions for aerie that I've seen before include "Visionary" , "wherein some types of bird may sit" , "Sort of nest" , "brood" , "inaccessible place" .)