Reject is dressed in blue (6)
I believe the answer is:
disown
'reject' is the definition.
(I know that disown is a type of reject)
'is dressed in blue' is the wordplay.
'dressed in' means one lot of letters goes inside another (inserted letters are dressed in others).
'blue' becomes 'down' (both can mean sad).
'is' put inside 'down' is 'DISOWN'.
(Other definitions for disown that I've seen before include "Abnegate" , "Reject all connection with, refuse to acknowledge" , "Repudiate, cast off" , "Reject all connection or relationship with" , "Deny any connection with" .)