Parrot -- one pal holds it (7)
I believe the answer is:
imitate
'parrot' is the definition.
(I've seen this before)
'one pal holds it' is the wordplay.
'one' becomes 'i' (Roman numeral).
'pal' becomes 'mate' (I've seen this before).
'holds' indicates putting letters inside.
'mate' placed around 'it' is 'mitate'.
'i'+'mitate'='IMITATE'
(Other definitions for imitate that I've seen before include "Parrot" , "I tame it to copy it" , "Follow suit" , "Take as a model" , "I ate Tim! (anag.)" .)