As of the time of this writing, Google does not provide a USB driver (for Windows) for the Nexus 5. The usual link (http://developer.android.com/sdk/win-usb.html) shows Windows USB drivers for several of the Nexus's line. However, the "Nexus 5" is not included. Note that the Nexus "S" (letter-S, not number-5) IS supported.
Also, from this site, the latest version of the current download is version-8, July-17-2013. When I compare this with its predecessor, version-7, the files are the same.
Until Google fixes this, what are we to do? How can we debug and develop for the Nexus 5?
The one from Google USB Driver worked fine for me on two machines (Windows 7 x64 on both). Once Windows failed to auto-install the driver, I just right-clicked on the phone in Device Manager, chose "update driver" and gave it the path that I'd unzipped that driver into.
There are multiple hardware revisions of Nexus 5. So, the accepted answer doesn't work for all devices (it didn't work for me).
Open Device Manager, right click and Properties. Now go to the "Details" tab And now select the property "Hardware Ids". Note down the PID and VID.
Download the Google driver
Update the android_winusb.inf with above VID and PID
Now in Device Manager, find Nexus 5, and update the driver software, and browse to the location where you downloaded.
The driver should be installed, and you should be see the device in ADB.
While Nexus 5 owners wait for a dedicated driver, you could try this driver, which is the one for the LG G2, from LG Electronics' website, since usually USB drivers are not limited to one particular model. This one, for example, seems like a generic USB driver. You are prompted to download the same one for quite a few models on LG Electronics' website.
I hope this helps you ;)
I am on Windows 8.1, and I tried everything from the other answers and nothing worked. Finally, I decided to try "Pick from a list of drivers" and found "LGE Mobile Sooner Single ADB Interface" under "ADB Interface". ADB.exe was finally able to find the Nexus 5 and sideload 4.4.1.
I hope this helps.
I was lost at first as well but found a fairly easy solution. Please note that I did all this on Windows 7 after enabling Developer Options and USB debugging on my Nexus 5 (on 4.4.2), then connecting it to my PC via USB.
If you go to the download link - http://developer.android.com/sdk/win-usb.html - you'll notice at the bottom in step 4, the installation location of the driver. If you then navigate to Devices and Printers from Control Panel and find your device, right-click and go to properties, then click the Hardware tab at the top, click the device displayed that is having issues, click properties, then Change settings. Next, select Update driver, choose the location manually, and choose the directory Google noted as the installation directory, which they noted as \extras\google\usb_driver\
This fixed the problem for me and my Nexus 5 now appears in DDMS.
Everything else here failed for me initially (it kept coming up as an MTP device no matter how many times I uninstalled and restarted).
However, by going and enabling USB debugging, it worked. Just do this: