Stars performing around carnival location (5)
I believe the answer is:
orion
'stars' is the definition.
(Orion is a constellation)
'performing around carnival location' is the wordplay.
'performing' becomes 'on' (as in being on stage).
'around' is an insertion indicator.
'carnival location' becomes 'Rio' (Rio de Janeiro is famous for its carnival).
'on' going around 'rio' is 'ORION'.
(Other definitions for orion that I've seen before include "Great hunter of Greek legend and a constellation" , "Greek hunter of myth or bright constellation" , "Star" , "His belt is in the heavens" , "Group in heaven" .)