Nathan Radley explains to Jem and Scout that the tree is sick at the end of Chapter 7.
Different books will have different page numbers. The actual page number will depend on the edition of the book you have. This quotation should be pretty easy to find, though, because it is near the end of the chapter. In the mass market paperback edition, which is the 50th Anniversary Edition (1988), it can be found on page 88.
Here is what happens.
“Mr. Radley, ah—did you put cement in that hole in that tree down yonder?”
“Yes,” he said. “I filled it up.”
“Why’d you do it, sir?”
“Tree’s dying. You plug ‘em with cement when they’re sick. You ought to know that, Jem.” (Ch. 7)
Atticus tells them the tree does not seem sick. The reason that Nathan Radley cemented the tree is because he caught Boo leaving presents in it for Scout and Jem. Although the children feel bad about having their line of communication to Boo cut off, to Nathan it must have seemed really strange for a grown man to be leaving presents for children. He decided to put a stop to it before it got very far.
Even if Scout does not understand the ramifications of Nathan Radley’s actions at first, Jem does. He is older and understands what Boo is trying to do. When Miss Maudie has a fire and Scout finds a blanket on her shoulders, Jem knows immediately who put it there. Atticus wants to return the blanket, but Jem knows that if he does, Nathan will know that Boo is interacting with the kids again and Jem is afraid that Nathan will be angry at him.
“…Mr. Nathan put cement in that tree, Atticus, an‘ he did it to stop us findin’ things—he’s crazy, I reckon, like they say, but Atticus, I swear to God he ain’t ever harmed us, he ain’t ever hurt us, he coulda cut my throat from ear to ear that night but he tried to mend my pants instead… he ain’t ever hurt us, Atticus—” (Ch. 8)
Although Scout is still somewhat afraid of Boo, Jem is not afraid at all. He knows that Boo is shy, harmless and sympathetic. He is just looking out for Boo. Atticus appreciates the delicacy of the situation and agrees not to return the blanket.
Despite the intervention of his brother, Boo Radley continues to be involved in the children’s lives from afar. It is because of this that he sees that they are in danger on Halloween night when Bob Ewell attacks them with a knife. Boo (Arthur) rescues them, killing Ewell and potentially putting himself in the limelight in the process. Atticus and the sheriff decide that they will pretend that Bob Ewell fell on his knife, to keep everyone from knowing that Boo is really a hero.
It is easy to see Nathan Radley as a villain in this story. He chases Jem off of his porch with a gun (not knowing it is him, of course). He fills in the knothole on the tree. He keeps his brother cloistered in the house. However, we have to remember that all of these events are seen through the eyes of the children, and colored from their perspective. In reality, Nathan is probably just trying to protect his brother in the only way he knows how.