In this paper the author constructs an asymptotic expansion of the resolvent of the operator of the Dirichlet problem for an elliptic equation of divergence form with a power degeneracy on the boundary. To construct the expansion a variant of the technique of pseudodifferential operators (DO’s) with operator-valued symbols is used, in combination with the technique of “ordinary” scalar iDO’s. The difference between the resolvent and the approximation thus obtained is an integral operator whose kernel decreases at infinity faster than any power of the spectral parameter. In a neighborhood of the boundary this operator smooths only in directions tangent to the boundary.