Let s be the space of rapidly decreasing sequences. We give the spectral representation of normal elements in the Fréchet algebra L(s ′ , s) of the so-called smooth operators. We also characterize closed commutative * -subalgebras of L(s ′ , s) and establish a Hölder continuous functional calculus in this algebra. The key tool is the property (DN ) of s.1 2010 Mathematics Subject Classification. Primary: 46H35, 46J25, 46H30. Secondary: 46H15, 46K10, 46A11, 46L05.Key words and phrases: Topological algebras of operators, topological algebras with involution, representations of commutative topological algebras, functional calculus in topological algebras, nuclear Fréchet spaces, C *algebras, smooth operators, space of rapidly decreasing smooth functions.